tag:blogger.com,1999:blog-34860883914631043022014-10-06T20:42:06.107-07:00The Future Of The Music BusinessSteve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.comBlogger35125tag:blogger.com,1999:blog-3486088391463104302.post-89588078169411472652014-05-27T10:02:00.000-07:002014-05-27T10:43:05.795-07:00Direct Licensing Controversy: Will Publishers Be Able To License Public Performing Rights To Digital Music Services Directly (Instead of through the PROs) and What Are the Consequences for Songwriters? <div class="MsoNoSpacing" style="text-align: left;"><b><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Definition</span></b></div><div class="MsoNormal"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">“Direct licensing” refers to a license to use music that is secured directly from the owner of that song or music recording.&nbsp; For instance, as we discuss in Section II of the book, in order to secure the right to use a song in a movie or TV program, it is necessary to secure a “synch” license directly from the company that owns or controls the copyright in that song, usually a music publisher, be it a major such as Sony/ATV or Universal Music, indie or self-published songwriter.<o:p></o:p></span></div><div class="MsoNormal"><br /></div><div class="MsoNormal"><b><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Collection Societies<o:p></o:p></span></b></div><div class="MsoNormal"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">However, because of the complexity of licensing music to all possible users for all possible uses, over time, copyright owners in the music business all around the world have set up what are referred to as “collection societies.”&nbsp; These groups are authorized to license and collect money on behalf of the music copyright owners for certain purposes.<o:p></o:p></span></div><div class="MsoNormal"><br /></div><div class="MsoNormal"><b><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">The PROs <o:p></o:p></span></b></div><div class="MsoNormal"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">In the U.S., songwriters and music publishers founded ASCAP in 1914<span style="background: white;"> to </span>license and collect money for the public performance of music.&nbsp; BMI was set up by broadcasters to essentially compete against ASCAP in 1940. SESAC was initially created in 1930 to represent contemporary European classical music (SESAC originally stood for “<em><span style="background: white; mso-bidi-font-weight: bold;">Society of European Stage Authors and Composers”)</span></em>. Each of these performing rights organizations or “PROs” are authorized by their publisher and songwriter members to license public performance rights for their music to radio and TV stations, concert halls, bars, nightclubs, restaurants, stores,&nbsp;&nbsp; amusement parks, bowling allies and anywhere else where music is publicly performed.<a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftn1" name="_ftnref1" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-size: 12pt; line-height: 200%;">[1]</span></span><!--[endif]--></span></a>&nbsp; Although this is a huge job, the PROs historically have not licensed any other rights than the right to publicly perform music. For instance, they are not authorized to issue “synch” licenses; so you cannot call them to acquire permission to use a song in your movie. And they do not represent “mechanical” rights so you cannot acquire a license from them to include a song in your record.</span></div><div class="MsoNormal"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">As the public performance of music moved to the Internet, the PROs started to license songs for use on platforms such as Pandora, YouTube and Spotify.&nbsp; At first, the music publishers were content to let the PROs license public performance right to these new platforms.&nbsp; But at a certain point starting in 2007<a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftn2" name="_ftnref2" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-size: 12pt; line-height: 200%;">[2]</span></span><!--[endif]--></span></a>, certain publishers, particularly the major publishers such as Sony, started experimenting with direct licensing of performance rights.&nbsp; These publishers were dissatisfied with the amount of money that the PROs were receiving from digital platforms. They were particularly irritated that their industry cousins, the record companies, were and are doing much better in the digital music space than they are.&nbsp; For instance, Pandora pays approximately 50% of its revenue to record companies and artists, but only approximately 4 percent to the music publishers and songwriters through licenses with the PROs. According to the <i>New York Times</i>, these percentages translate into approximately $313 million dollars and $26 million dollars respectively.<a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftn3" name="_ftnref3" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-size: 12pt; line-height: 200%;">[3]</span></span><!--[endif]--></span></a> <o:p></o:p></span></div><div class="MsoNormal"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">The problem is, from the point of view of the publishers, both ASCAP and BMI are in a relatively weak bargaining position because they both operate under government imposed “consent decrees” which limits their bargaining power. (SESAC, which is much smaller than ASCAP and BMI, is not subject to a consent decree.)<o:p></o:p></span></div><div class="MsoNormal"><br /></div><div class="MsoNormal"><b><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Consent Decrees &amp; the “Rate Court”<o:p></o:p></span></b></div><div class="MsoNormal"><span style="background: white; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">In the late 1930s, ASCAP's general control over most music and its membership requirements were considered to be in restraint of trade and illegal under the<span class="apple-converted-space">&nbsp;</span></span><a href="http://en.wikipedia.org/wiki/Sherman_Anti-Trust_Act" title="Sherman Anti-Trust Act"><span style="background: white; color: windowtext; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Sherman Anti-Trust Act</span></a><span style="background: white; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">. The<span class="apple-converted-space">&nbsp;</span></span><a href="http://en.wikipedia.org/wiki/U.S._Department_of_Justice" title="U.S. Department of Justice"><span style="background: white; color: windowtext; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Justice Department</span></a><span class="apple-converted-space"><span style="background: white; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">&nbsp;</span></span><span style="background: white; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">sued ASCAP in 1941, and the case was settled with a<span class="apple-converted-space">&nbsp;</span></span><a href="http://en.wikipedia.org/wiki/Consent_decree" title="Consent decree"><span style="background: white; color: windowtext; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">consent decree</span></a><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">.&nbsp; </span><a href="http://en.wikipedia.org/wiki/Broadcast_Music,_Inc." title="Broadcast Music, Inc."><span style="background: white; color: windowtext; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">BMI</span></a><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">, which was formed in 1940,<span class="apple-converted-space"><span style="background: white;">&nbsp;</span></span><span style="background: white;">also signed a consent decree in 1941. Among the most important points in the decree is that ASCAP and BMI cannot “discriminate” between users of music who have basically the same requirements. For instance, they must treat all bars and restaurants in a similar manner. Also, and even more importantly, ASCAP and BMI cannot deny anyone a public performance license. If the parties cannot agree on a rate, the consent decree provides<span class="l6"><span style="border: none windowtext 1.0pt; letter-spacing: 1.5pt; mso-border-alt: none windowtext 0in; padding: 0in;">&nbsp;a mechanism whereby any party&nbsp;</span></span><span class="l10"><span style="border: none windowtext 1.0pt; letter-spacing: 1.5pt; mso-border-alt: none windowtext 0in; padding: 0in;">may petition t</span></span></span>he&nbsp;United&nbsp;States District&nbsp;Court&nbsp;for&nbsp;the&nbsp;Southern&nbsp;District&nbsp;of&nbsp;New&nbsp;York (the&nbsp;“rate court”)&nbsp;for determination of a reasonable fee.<span style="background: white;">&nbsp; The ASCAP and BMI rate courts are each overseen by a federal district court judge. Rate court proceedings are essentially non-jury trials. <o:p></o:p></span></span></div><div class="MsoNormal"><br /></div><div class="MsoNormal"><b><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Major Publishers Make a Move but the Rate Court Rebuffs Them <o:p></o:p></span></b></div><div class="MsoNormal"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">To get around the consent decrees, some big publishers tried to change their ties with ASCAP and BMI, forcing digital services like Pandora to negotiate directly with them. In 2011, EMI Music Publishing, which later merged with Sony/ATV to become the largest music publisher in the U.S., was the first of the major publishers to pull from both the two major PROs (first ASCAP, and soon after BMI) the right to license its songs to certain “New Media Services” in order to gain leverage in direct license negotiations (i.e., to negotiate higher royalty rates) with services like Pandora. Unlike ASCAP and BMI, copyright owners enjoy exclusive control of their musical works and are not constrained by consent decrees. This means the publishers can withhold the right to use their songs for any reason.</span><span class="MsoCommentReference"><span style="font-size: 9.0pt; line-height: 200%;">&nbsp;</span></span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">In late 2012, Sony/ATV – which had followed EMI’s lead and withdrew digital rights from the PROs -- successfully negotiated a deal with Pandora for its repertoire at a rate of 5% (pro-rated by the amount of Sony’s songs played on Pandora) of Pandora’s revenue; this rate was 25% higher than the approximate 4% that the PROs were receiving from Pandora at that time. But the publishers’ withdrawal strategy appeared to backfire in two separate decisions by the ASCAP and BMI rate court judges in rate proceedings initiated by Pandora around the time of the Sony/ATV-Pandora direct license. <o:p></o:p></span></div><div class="MsoNormal"><br /></div><div class="MsoNormal" style="line-height: 17.25pt; margin-bottom: 13.5pt; vertical-align: baseline;"><b><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">The ASCAP-Pandora Rate Proceeding and Judge Cote’s Summary Judgment Decision (September 2013)<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 17.25pt; margin-bottom: 13.5pt; vertical-align: baseline;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">In 2010, before withdrawal from PROs began to occur, Pandora terminated its then-existing license with ASCAP under which it was paying the greater of 1.85% of its gross income and a use-based minimum fee for the right to perform any or all of songs in the ASCAP repertoire. At the behest of its major publisher members, ASCAP modified its rules so that publisher members could negotiate exclusive direct licenses for “New Media Services” such as Pandora. Prior to such changes, all of ASCAP and BMI’s arrangements with their members (both publishers and songwriters) were non-exclusive, allowing either ASCAP or a publisher to negotiate licenses with music users.&nbsp; As a practical matter, therefore, there had rarely been an incentive for publishers to pursue direct licenses so long as music users could fall back on ASCAP licenses. <o:p></o:p></span></div><div class="MsoNormal" style="line-height: 17.25pt; margin-bottom: 13.5pt; vertical-align: baseline;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Recall, the first publisher to withdraw digital rights from ASCAP was EMI Music Publishing in May 2011. Upon learning of EMI’s action, Pandora started negotiating with EMI. During the course of that negotiation Sony/ATV acquired EMI’s music catalogue.&nbsp; Subsequently, other major publishers, including Warner Chappell, Universal and BMG, announced their intention to withdraw their digital rights from the PROs, and Pandora started negotiations with them as well. In 2012 Pandora, faced with rate hikes demanded by the “withdrawn” majors, filed a Summary Judgment motion in the ASCAP rate court proceeding asking for a determination that ASCAP was required to license all the songs in its repertoire under its consent decree. Pandora complained that it had been put in “absolute gun-to-the-head circumstances” in negotiations with Sony and other big publishers.&nbsp; They also argued that treating digital services differently than other licensees, such as terrestrial broadcasters, by only offering part of their repertoire was discriminatory towards New Media services and violated the consent decree. In its decision rendered on September 18<sup>th</sup> 2013 the court sided with Pandora. Judge Cote stated in relevant part:</span><span class="MsoCommentReference"><span style="font-size: 9.0pt;">&nbsp;</span></span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 17.25pt; margin-bottom: 13.5pt; margin-left: .4in; margin-right: 0in; margin-top: 0in; text-indent: 0in; vertical-align: baseline;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Because the language of the consent decree unambiguously requires ASCAP to provide Pandora with a license to perform all of the works in its repertory, and because ASCAP retains the works of “withdrawing” publishers in its repertory even if it purports to lack the right to license them to a subclass of New Media entities, Pandora’s motion for summary judgment is granted.<a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftn4" name="_ftnref4" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-size: 12pt; line-height: 200%;">[4]</span></span><!--[endif]--></span></a><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 17.25pt; margin-bottom: 13.5pt; margin-left: .4in; margin-right: 0in; margin-top: 0in; text-indent: 0in; vertical-align: baseline;"><br /></div><div class="MsoNormal" style="line-height: 17.25pt; margin-bottom: 13.5pt; vertical-align: baseline;"><b><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">The BMI-Pandora Rate Proceedings and Judge</span></b><span class="apple-converted-space"><span style="background: white; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"> </span></span><b><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Stanton’s Summary Judgment Decision<span style="background: white;"> (December 2013)</span><o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 17.25pt; margin-bottom: 13.5pt; vertical-align: baseline;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">In a parallel proceeding to Pandora’s action against ASCAP, Pandora also asked for a determination that BMI had to license its entire repertoire even though the big publishers had withdrawn digital rights from BMI just as they did with ASCAP.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 17.25pt; margin-bottom: 13.5pt; vertical-align: baseline;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">The BMI rate court judge, Louis Stanton, ruled that publishers seeking to withdraw digital rights from BMI had to completely withdraw all songs and all rights -- throwing the entire publishing business into a state of confusion. The decision meant that Sony, Universal, Warner and BMG and other big publishers could continue doing direct deals but only if they did them with ALL users of music, not just digital platforms. For tens of thousands of “general” licenses in effect with stores, bars, hotels and concert halls that are automatically renewed annually, it looked like those blanket licenses would no longer include the repertoire of major publishers -- accounting for nearly half the market. In the <span style="background: white;">ASCAP case, Judge Cote found that publishers are “all in” unless they resign from ASCAP completely; conversely, Judge Stanton has decided that publishers are “all out” if they have withdrawn new media rights from BMI.</span><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 17.25pt; margin-bottom: 13.5pt; vertical-align: baseline;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Universal had announced it would withdraw digital rights from BMI beginning January 1, 2014. As a result of the BMI decision, Universal entered into a short-term deal with BMI for its entire catalog to remain a part of the blanket license offered by BMI to all music users. Universal’s deal with BMI is short-term because it, like other major publishers, hopes that the Department of Justice will agree to amend the consent decrees so that digital rights can be withdrawn. <o:p></o:p></span></div><div class="MsoNormal" style="line-height: 17.25pt; margin-bottom: 13.5pt; vertical-align: baseline;"><br /></div><div class="MsoNormal"><b><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">The Publishers New Strategy: Amend the Consent Decrees<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 17.25pt; margin-bottom: 13.5pt; vertical-align: baseline;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Martin Bandier, president of Sony/ATV, which is partly owned by the Michael Jackson estate, is attempting to secure higher rates from digital services than ASCAP and BMI have been able to achieve.&nbsp; Bandier said in a statement, “In the current digital environment, it is critical that we reform the system, which does not fairly compensate songwriters and composers</span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">.”<a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftn5" name="_ftnref5" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-size: 12pt; line-height: 200%;">[5]</span></span><!--[endif]--></span></a> Against that backdrop, the large publishers like Universal as well as Sony/ATV have approached the Justice Department about getting the consent decrees amended to allow for partial rights withdrawal so they can negotiate directly with Internet radio services such as Pandora, Songza, and iHeart radio. <o:p></o:p></span></div><div class="MsoNormal" style="line-height: 17.25pt; margin-bottom: 13.5pt; vertical-align: baseline;"><span style="background: white; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">The PROs are “regulated by an antiquated consent decree with the Justice Department that was last amended before the introduction of the iPod," UMPG chairman/CEO Zach Horowitz said in a statement.<a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftn6" name="_ftnref6" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="background-position: initial initial; background-repeat: initial initial; color: black; font-size: 12pt; line-height: 200%;">[6]</span></span><!--[endif]--></span></a>"The decree is ill-suited for the changes in the digital marketplace. A recent court ruling would require us to withdraw our repertoire from BMI for all purposes in order to retain the right to directly negotiate with mobile and online music services. We don't believe that the consent decree should work this way."</span><span class="MsoCommentReference"><span style="font-size: 9.0pt;">&nbsp;</span></span><a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftn7" name="_ftnref7" title=""><span class="MsoFootnoteReference"><span style="background: white; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="background-position: initial initial; background-repeat: initial initial; color: black; font-size: 12pt; line-height: 200%;">[7]</span></span><!--[endif]--></span></span></a><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p></o:p></span></div><div class="MsoNormal" style="line-height: 17.25pt; margin-bottom: 13.5pt; vertical-align: baseline;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">In cutting short-term deals, publishers now have time to see what rates are set and if the Justice Department is willing to negotiate amendments to the consent decrees. Staying with the PROs in short-term deals “gives us time to reflect -- we can look at the rate court decisions and for alternatives if need be, including whether the DOJ can see its way clear to amend the consent decree,” Bandier says.<o:p></o:p></span></div><div class="MsoNormal" style="line-height: 17.25pt; margin-bottom: 13.5pt; vertical-align: baseline;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">If publishers don’t like the rates established by the courts, or if it appears that the Justice Department is dragging its heels on amending the consent decrees, publishers will then have the option of completely withdrawing from the PROs. In the meantime, they have more time to prepare for that day, should it come.<span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span style="color: black; font-size: 12pt; line-height: 200%;">[8]</span></span></span></span></div><div class="MsoNormal"><b><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Why Direct Deals May Be Horrible for Songwriters <o:p></o:p></span></b></div><div class="MsoNormal"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Songwriters as well as publishers have expressed frustration with the present state of affairs. For instance, in 2012, several very successful songwriters testified at congressional hearings. They reported that hit songs that they wrote for stars like Beyoncé and Christina Aguilera that were performed more than 33 million times by Pandora yielded just $587.39 in royalties for the songwriters. These reports of huge number of plays equating to very little in songwriter royalties have become very common. For instance, in April 2014, Bette Midler received attention when she complained that she had over 4,175,149 million plays on Pandora but only received $144.21.<a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftn9" name="_ftnref9" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-size: 12pt; line-height: 200%;">[9]</span></span><!--[endif]--></span></a> <o:p></o:p></span></div><div class="MsoNormal"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">However, these meager pay-outs come from ASCAP, BMI and SESAC -- not Pandora. Pandora pays the PROs, not the publishers or songwriters. The PROs collect all the money for public performance from Pandora. <i>They </i>then determine what a play on Pandora is worth, not Pandora. On the other hand, the PROs would argue that they would pay their writers more if they received more from Pandora. Still, the truth is that this point is constantly ignored in the media and the hype spread by the music industry’s PR machine. <o:p></o:p></span></div><div class="MsoNormal"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">But whether Pandora is paying its fair share for the songs it uses or not</span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">, it is crucial to point out the following facts, which are also often overlooked: <o:p></o:p></span><br /><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><br /></span></div><div class="MsoNormal"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-bidi-font-weight: bold;">1. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Many Writers are "Unrecouped"</span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p></o:p></span></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; text-align: justify;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Well heeled publishers, including the majors, generally offer the songwriters they wish to sign (commercially successful ones who write “hits”) “advances” to convince them to sign with their company. These advances can range from tens of thousands to millions of dollars. Advances are essentially loans; after receiving the advance the writers do not receive any royalties unless and until their songs earn enough money to pay back the advances.&nbsp;&nbsp;Many writers&nbsp;</span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">never “recoup.” After delivering a contractually required number of songs, the publisher generally pays another advance, i.e., another loan. Therefore the songwriter </span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">may never receive any royalties. For these writers the only money they may make other than the publishing advance is their payment from a PRO. This has become what is known as the “ASCAP check” although BMI and SESAC writers depend just as much on their payments from these PRO.&nbsp;Unlike publishers, ASCAP, BMI and SESAC all pay writers and publishers each 50% of the total royalty earned by a song performance. The 50% payable to songwriters, what is known as the “Songwriter’s share” is paid directly to the songwriter. In fact, many writers never see another dollar from their publishers&nbsp;<span style="border: none windowtext 1.0pt; mso-border-alt: none windowtext 0in; padding: 0in;">except for the checks they receive from ASCAP, BMI, or SESAC</span>.&nbsp;&nbsp;Publishers only pay royalties (generally 50% to 75% for synch and mechanical royalties) after recoupment, that is, after repayment of the advance. (It is worth noting that ASCAP was set up by powerful songwriters such as Irving Berlin, </span><span style="background-position: initial initial; background-repeat: initial initial; color: #252525; font-family: 'Times New Roman', serif;">Jerome Kern</span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">and John Philip Souza as well as their publishers -- so they set up a system that was very favorable to songwriters compared to other parts of the music business.) BMI and SESAC follow the same system of paying writers 50% directly when they were created in order to compete against ASCAP in signing up the most successful songwriters. <o:p></o:p></span></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; text-align: justify;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">With a direct license, the publishers receive all the money from a licensee. They are supposed to turn a portion of those monies to the writers UNLESS the writer is unrecouped. If the writers are unrecouped as many usually are, the publishers</span><span class="MsoCommentReference"><span style="font-size: 9.0pt;">&nbsp;</span></span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">do not have to share any of those direct licensing monies with their songwriters. <o:p></o:p></span></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; text-align: justify;"><br /></div><div class="MsoNormal"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">2. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;Publishers Generally Do Not Have To Share Advance Monies With Their Songwriters<o:p></o:p></span></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; text-align: justify;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">In 2007 Sony negotiated a direct deal with DMX, the digital background music service. In doing so, it received an advance payment of 2.7 million dollars. It is doubtful whether Sony’s writers received any portion of this money. And this is why: Individual music publishing contracts vary depending on the bargaining power of individual writers or the negotiating skills of their lawyers (among other reasons), but almost all agreements have a provision similar to this one:<o:p></o:p></span><br /><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><br /></span></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; margin-bottom: 12pt; text-align: justify;"><div style="text-align: left;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; “In no event shall composer be entitled to share in&nbsp;<span style="border: none windowtext 1.0pt; mso-border-alt: none windowtext 0in; padding: 0in;">any</span>&nbsp;advance payments, guarantee payments or minimum royalty payments which Publisher may receive in connection with&nbsp;any sub&nbsp;publishing agreement, collection agreement, licensing agreement or other agreements …"<o:p></o:p></span></div></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; text-align: justify;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">The rationale for this clause is that if a publisher secures an advance for all of its songs it should not have to share that money with each songwriter. But the clause did not contemplate direct licenses by publishers for performing rights. Around the world, writers are usually paid performance fees directly by performing rights organizations (for example, PRS in England, JASRAC in Japan, GEMA in Germany as well as ASCAP, BMI and SESAC in the U.S.).&nbsp; However, if publishers are allowed to enter into direct licenses, this clause would allow the advances to fall into publishers’ coffers.&nbsp;</span></div><div class="MsoNormal"><br /></div><div class="MsoNormal"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">3. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Direct deals could hurt independent publishers and songwriters<o:p></o:p></span></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; text-align: justify;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">The above factors could have the most negative impact on writers signed to major publishers. The reason is that major publishers are more likely to pursue direct licenses than the indies. That’s because the majors feel they can get better rates than ASCAP and BMI. But a small publisher will be more hesitant to withdraw digital rights from the PROs. They have much less bargaining power because they are small. They are also more likely to want ASCAP and BMI to negotiate on their behalf because they will be negotiating as part of a group even though the group may not be as powerful without the major publishers. However, even writers signed to indie publishers may suffer if the majors do direct deals. This is why: (a) If the majors do direct deals, it would diminish ASCAP and BMI’s bargaining power which in turn would decrease the amount of money that these organizations could secure from digital services; this would have the effect of diminishing the pay-outs to the writers of the songs that remained with the PROs; and (b) If the big publishers secure advances from licensees in exchange for lower royalties this could have the effect of driving down the rates ASCAP and BMI can negotiate with the same licensees. Indeed, this is exactly what happened with ASCAP and BMI’s licenses with DMX after Sony concluded the aforementioned direct deal with DMX. <o:p></o:p></span></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; margin-bottom: 3.75pt; text-align: justify;"><br /></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; margin-bottom: 3.75pt; text-align: justify;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">DMX provides background music via digital means to approximately 100,000 locations including restaurants, bars, clubs, retail stores and chains.<a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftn10" name="_ftnref10" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-size: 12pt; line-height: 200%;">[10]</span></span><!--[endif]--></span></a> DMX and BMI failed to agree on the price for a blanket license, and DMX initiated an action in rate court in 2010 asking </span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">the court to reduce the amount that BMI sought to charge.&nbsp;BMI sought a blanket license fee of $41.81 per location. DMX argued that it had secured “direct licenses” from 550 different publishers at the rate of $25 per location, and that that amount should be used as a “benchmark” for the true market value of BMI’s blanket license. The court agreed, and significantly reduced the fee DMX would have otherwise had to pay BMI. The judge held that the blanket license fee for use of BMI songs should be only $18.91 per location.<a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftn11" name="_ftnref11" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-size: 12pt; line-height: 200%;">[11]</span></span><!--[endif]--></span></a> <o:p></o:p></span></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; margin-bottom: 3.75pt; text-align: justify;"><br /></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; margin-bottom: 3.75pt; text-align: justify;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">BMI’s then President and CEO, Del Bryant, said in a statement, “Our writers and publishers should not be expected to lose more than half of their income from DMX based on the court’s erroneous holdings, which substantially reduce the value of their creative efforts.”<a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftn12" name="_ftnref12" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-size: 12pt; line-height: 200%;">[12]</span></span><!--[endif]--></span></a> In a subsequent action against ASCAP (in December 2010), DMX was also successful in significantly reducing ASCAP’s per location rate to $13.74.<a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftn13" name="_ftnref13" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="color: black; font-size: 12pt; line-height: 200%;">[13]</span></span><!--[endif]--></span></a> In 2012 the Second Circuit affirmed both rate court decisions. <o:p></o:p></span></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; margin-bottom: 3.75pt; text-align: justify;"><br /></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; margin-bottom: 3.75pt; text-align: justify;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">BMI had argued that of the 550 “direct licenses,” there was only one license with a major publisher, Sony/ATV. The court found that the $25 per location fee was a good benchmark for the real market place value of a license for all the songs DMX plays. However, the court did not consider it relevant that DMX paid a $2.7 million advance to Sony. BMI maintained that although the nominal rate Sony agreed to was $25 it would never have entered into the direct license unless it received the advance, and that DMX used the deal with Sony to persuade many of the 549 other direct licensees to accept the $25 per location rate. BMI also pointed out that DMX never told the other direct licensee publishers about the advance payment to Sony, and instead assured them “they would be the same as a sophisticated major publisher who had accepted the same deal.” Finally and most tellingly, the $2.7 million represented approximately 150% of all royalties Sony received from both ASCAP and BMI for one year.&nbsp;<o:p></o:p></span></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; margin-bottom: 3.75pt; text-align: justify;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">This case shows that the major publishers, if freed up to make direct deals may force licensees to pay advances in exchange for lower royalties and this may negatively affect the songwriters who are represented by indie publishers. <o:p></o:p></span></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; margin-bottom: 3.75pt; text-align: justify;"><br /></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; margin-bottom: 3.75pt; text-align: justify;"><b><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">A Proper Solution to Avoid Screwing the Writers<o:p></o:p></span></b></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; margin-bottom: 3.75pt; text-align: justify;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">I talked to the president of an indie publisher who was also a lawyer and he understood the issue under discussion above. He told me he revised his deal with songwriters that if his company did a direct deal for public performance rights, that he would pay them 50% of anything the publisher received off the top without deducting any unrecouped advances. If the consent decrees are amended to allow for partial withdrawals from the PROs, hopefully the DOJ&nbsp; will require the same level of writer protection.&nbsp; <o:p></o:p></span></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; margin-bottom: 3.75pt; text-align: justify;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><br /><br /><b>Final Note: Even If The Consent Decrees Are Amended and Major Publishers Withdraw Digital Rights from ASCAP and BMI, Certain Songs in their Catalogues, Including Huge Hits, May Be Excluded</b></span></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; text-align: justify;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-bidi-font-weight: bold;">Amanda Harcourt is an English attorney and former law professor who helped me write Chapter 8 of this book on international digital music licensing. As we discuss in more detail there, a </span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">key difference between the relationship between U.S. songwriters and ASCAP and BMI on the one hand, and the relationship between songwriters and PROs in other countries such as England is that the former is non-exclusive, but the latter is exclusive. That is, outside the U.S. composers and songwriters assign their broadcast and performing rights to their local society on an exclusive and a global basis.&nbsp; Only their local society can exercise this right and worldwide performing rights flow through the collecting society network under reciprocal contracts between the PROs. This means that ASCAP acquires rights to license public performance rights from foreign songwriters through its reciprocal agreements with foreign societies that, in turn, secure their rights on an exclusive basis. Even if major U.S. publishers withdrew completely from ASCAP and BMI, they would not be able to license, for example, songs by songwriters signed to foreign societies including PRS in England. Those songs include the Beatles songs written by Lennon and McCartney and Rolling Stones songs by Jagger and Richards. Those songs can only be licensed pursuant to PRS’ reciprocal deal with BMI. If nothing else, this would add another good reason for the PROs’ continuing existence even if the major publishers decided to withdraw completely from ASCAP and BMI.&nbsp; <o:p></o:p></span></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; text-align: justify;"><br /></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; text-align: justify;">Steve Gordon is an entertainment attorney specializing in music, television and video, who also provides music and sample clearance services for producers and distributors of documentaries, feature films, TV shows, ad campaigns, concert videos, musical theater, digital based projects, audio records and compilations. He is the author of The Future of the Music Business (Hal Leonard 4th ed. 2014). &nbsp;&nbsp;He can be reached at steve@stevegordonlaw.com</div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; text-align: justify;"><br /></div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; text-align: justify;">The author wishes to thank Markova Casseus, a student specializing in music industry studies at Syracuse University, for her assistance in writing this article.</div><div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; margin: 6pt 0in 0.0001pt -0.5in; text-align: justify;"><o:p></o:p></div><div class="MsoNormal"><br /></div><div><!--[if !supportFootnotes]--><br clear="all" /><hr align="left" size="1" width="33%" /><!--[endif]--> <br /><div id="ftn1"><div class="MsoNormal"><a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftnref2" name="_ftn2" title=""><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; font-size: 10pt; line-height: 26.66666603088379px;">[1]</span></span></span></a>&nbsp;&nbsp;<span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Most commercially successful publishers in the U.S. are members of all three PROs. The reason is they have writers who are members of each of the three PROs. All three PROs require that in regard to any particular song, both the writer and the publisher be members of that society. So if a writer is with BMI and registers songs there the publisher must be registered with BMI also. Writers, however, cannot be members of more than one society at the same time.</span></div></div><div id="ftn2"><div class="MsoFootnoteText"><a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftnref2" name="_ftn2" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; font-size: 10.0pt; line-height: 200%; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[2]</span></span><!--[endif]--></span></a>&nbsp; <span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt;">Sony/ATV’s direct license to digital music service DMX, discussed below.</span><o:p></o:p></div></div><div id="ftn3"><div class="MsoFootnoteText"><a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftnref3" name="_ftn3" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; font-size: 10.0pt; line-height: 200%; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[3]</span></span><!--[endif]--></span></a> <i><span style="font-size: 12pt;">Pandora Suit May Upend Century-Old Royalty Plan by Ben Sisario, NY Times Feb 13, 2014. </span></i><span style="font-size: 12.0pt;">Note that ASCAP received 1.85%, BMI received 1.75%. It is not public information what SESAC receives although their standard Internet license requires .6% so they probably receive a similar amount from Pandora if not the same.&nbsp; </span><o:p></o:p></div></div><div id="ftn4"><div class="MsoFootnoteText"><a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftnref4" name="_ftn4" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; font-size: 10.0pt; line-height: 200%; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[4]</span></span><!--[endif]--></span></a> <i>In re Petition of Pandora Media, Inc. Related to U.S. vs. ASCAP</i> (S.D.N.Y. 2013).<i><o:p></o:p></i></div></div><div id="ftn5"><div class="MsoFootnoteText"><a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftnref5" name="_ftn5" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; font-size: 10.0pt; line-height: 200%; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[5]</span></span><!--[endif]--></span></a> <i>Billboard.com/Biz</i>, February 14, 2014. <o:p></o:p></div></div><div id="ftn6"><div class="MsoFootnoteText"><a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftnref6" name="_ftn6" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; font-size: 10.0pt; line-height: 200%; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[6]</span></span><!--[endif]--></span></a> <i>Billboard.com/Biz, </i>January 30, 2014.<o:p></o:p></div></div><div id="ftn7"><div class="MsoFootnoteText"><a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftnref7" name="_ftn7" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; font-size: 10.0pt; line-height: 200%; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[7]</span></span><!--[endif]--></span></a> <i>Billboard.com/Biz</i>, January 30, 2014.</div></div><div id="ftn8"><div class="MsoNormal"><a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftnref2" name="_ftn2" title=""><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; font-size: 10pt; line-height: 26.66666603088379px;">[8]</span></span></span></a>&nbsp;&nbsp;<span style="color: #17365d; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-themecolor: text2; mso-themeshade: 191;">In addition to efforts to amend the consent decrees, the three PROs and the National Music Publishers’ Association which, among other things, manages the legislative and legal agendas for most U.S. music publishers and operates the Harry Fox agency, are supporting a piece of legislation entitled the “</span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Songwriter Equity Act” (HR 4079.) Introduced in February 2014&nbsp; by </span><strong><span style="color: #333333; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Congressman Doug Collins (R-GA), the bill would </span></strong><span style="color: #333333; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">allow the rate court to consider other royalty rates, specifically, what the record companies are receiving, as evidence when establishing digital performance rates for songwriters and composers. Currently Section 114(i) of the Copyright Act forbids the Federal rate courts from considering sound recording royalty rates as a relevant benchmark when setting rates between ASCAP, BMI and their licensees. As discussed previously the PRO’s are currently receiving only approximately 4% of gross revenues (subscriptions and advertising) from Pandora and approximately 6-7% of gross revenues from interactive digital services such as Spotify. The record companies and artists on the other hand are receiving approximately 50% from Pandora and the interactive services. The publishers consider this unfair although the labels do spend a great deal more than publishers for the production marketing, promotion, advertising and distribution of the music.&nbsp; In any event, the bill would amend 114(i) to allow ASCAP and BMI to present evidence to the courts of how much the labels are getting.&nbsp;</span><span style="background-color: white; color: #333333; line-height: 15.95pt;">The bill would also amend the standard by which the Copyright Royalty Board determines the statutory rate for the mechanical royalties. The bill would amend Section 115 of Copyright Act to allow the CRB to consider the “fair market value” of songs. The initial rate set by Congress in 1909 was 2 cents per song. Today, the rate is 9.1 cents per song.&nbsp; This is considered too small by the publishing community.</span><b style="background-color: white; color: #333333; line-height: 15.95pt;">&nbsp; &nbsp;</b><br /><a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftnref2" name="_ftn2" style="background-color: white;" title=""><span class="MsoFootnoteReference"><span class="MsoFootnoteReference"><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; font-size: 10pt; line-height: 26.66666603088379px;">[9]</span></span></span></a><span style="background-color: white;">&nbsp;&nbsp;</span><i style="line-height: 15.95pt;">Digital Music News</i><span style="line-height: 15.95pt;">, April 6, 2014. Midler’s claim should be considered with caution because she does not write all the songs she records, and many of her hits are co-written with other composers. The sum stated apparently&nbsp; not reflect monies paid to those writers and their publishers.</span></div></div><div id="ftn10"><div class="MsoFootnoteText"><a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftnref10" name="_ftn10" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; font-size: 10.0pt; line-height: 200%; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[10]</span></span><!--[endif]--></span></a> <i>In re Application of THP Capstar Acquisition Corp. (now known as DMX, Inc.) vs. ASCAP, 756 </i>F. Supp. 2d 516 (S.D.N.Y. 2010).&nbsp; <span style="background: yellow; mso-highlight: yellow;"><o:p></o:p></span></div></div><div id="ftn11"><div class="MsoFootnoteText"><a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftnref11" name="_ftn11" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; font-size: 10.0pt; line-height: 200%; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[11]</span></span><!--[endif]--></span></a> <i>Broadcast Music, Inc. vs. DMX, Inc.</i>, 726 F. Supp. 2d 355 (S.D.N.Y. 2010).<o:p></o:p></div></div><div id="ftn12"><div class="MsoFootnoteText"><a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftnref12" name="_ftn12" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; font-size: 10.0pt; line-height: 200%; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[12]</span></span><!--[endif]--></span></a>www.BMI.com<i>, News, </i>August 24, 2010.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <o:p></o:p></div></div><div id="ftn13"><div class="MsoFootnoteText"><a href="file:///C:/Users/Brooke/Downloads/book14-Direct%20licensing5.23.docx#_ftnref13" name="_ftn13" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; font-size: 10.0pt; line-height: 200%; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">[13]</span></span><!--[endif]--></span></a> <i>In re Application of THP Capstar Acquisition Corp. (now known as DMX, Inc.) vs. ASCAP, 756 </i>F. Supp. 2d 516 (S.D.N.Y. 2010).</div></div></div><div><div><div class="msocomtxt" id="_com_11" language="JavaScript"><!--[if !supportAnnotations]--></div><!--[endif]--></div></div>Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com0tag:blogger.com,1999:blog-3486088391463104302.post-43569041000552514762014-04-18T17:34:00.000-07:002014-04-19T07:11:43.124-07:00Excerpt of Music Clearances Section of 4th Edition of The Future of the Music Business <strong style="font-family: inherit; font-size: 12pt;">MUSIC CLEARANCE BASICS</strong><br /><div class="MsoNoSpacingCxSpMiddle" style="margin: 1em 0px;"><br /><span style="font-size: 12pt;"><span style="font-family: inherit;"><em>Songs vs. Masters</em><br /><br />To secure the right to use music in various projects, producers need to consider that there are two distinct copyrightable "works" that are in involved in clearing music: </span></span><br /><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1. “musical works,” that is, songs and other musical compositions, and </span><br /><br /><span style="font-family: inherit;"><span style="font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2</span><span style="font-size: 12pt;">. “sound recordings,” that is, the recordings of those songs</span></span><br /><br /><span style="font-family: inherit; font-size: 12pt;">A song or musical composition is the underlying music embodied in a sound recording, and these recordings are also sometimes referred to as “masters.” To use a recording of a song, both of these “copyrights” have to be cleared.<span style="mso-spacerun: yes;">&nbsp; </span>For example, if you wish to use Aretha Franklin's recording, you will have to clear both the recording and the underlying song.</span></div><span style="font-size: 12pt;"><em>Copyright Owner: Music Publishers and Record Labels</em><br /></span><br /><div class="MsoNoSpacingCxSpMiddle" style="margin: 1em 0px;"><span style="font-size: 12pt;"><span style="font-family: inherit;">To continue with this example, in order to clear the song, you will have to identify the songwriters. This information can sometimes be found on album packaging or through research. In this case, Burt Bacharach and Hal David wrote “Walk on By.” You should not, however, try to contact the songwriters. Instead you would contact their representatives, who are generally music publishers. In this case you would contact Universal Music who administers on behalf of Mr. Bacharach, and BMG Music which administers on behalf of the estate of Hal David. You will need the permission of both. If the permission of Mr. Bacharach or the estate of Hal David are required they will secure it. But generally, only the music publishers, in this case Universal and BMG, may issue a license for you to use the song. In music clearance parlance BMG and Universal are “co-publishers” of the song. With respect to royalties or fees they will indicate in the written quotes what their percentage of ownership is, and the actual amount of money payable to each will depend on this percentage. For instance, if each publisher controlled 50% of the song and the fee for these of the song for a particular project was $1000, $500 would be payable to each upon their issuance of licenses.<span style="mso-spacerun: yes;">&nbsp;</span></span></span></div><span style="font-size: 12pt;"></span><span style="font-family: inherit; font-size: 12pt;">Now let’s focus on Aretha Franklyn’s recording. Although she may have recorded the song for other record labels, or as a gust on various TV shows, her most famous recording of this song was as a recording artist for Columbia Records. The performance of the song was initially released by Columbia in an album called “Jazz to Soul.”<span style="mso-spacerun: yes;">&nbsp; </span>Generally recording artists such as Ms. Franklyn transfer their rights in their performances on a “work for hire” basis to the record company in accordance with standard terms recording agreements. In this case Aretha would have transferred any rights she may otherwise have had in the recording to Columbia Records. Columbia is now owned by Sony Music. Therefore you would have to receive authorization from Sony to use this recording.</span><br /><br /><span style="font-family: inherit; font-size: 12pt;"><em>“Synch” license vs. “Master use” license</em></span><br /><div class="MsoNoSpacingCxSpMiddle" style="margin: 1em 0px;"><span style="font-size: 12pt;"><span style="font-family: inherit;">A license for the use of a song in an audiovisual project such as movie or TV show is referred to as a “synch license.” The origins of this term stems from the fact that the producer is synchronizing the song to a visual image. The producer is of course<span style="mso-spacerun: yes;">&nbsp; </span>synchronizing the recording to a visual image when he uses a recording of a song in a movie,<span style="mso-spacerun: yes;">&nbsp; </span>but that licenses is sometimes referred as a “master use” license. The term is used to avoid confusion, that is, to indicate that the license is for the use of a recording rather than the underlying song.<span style="mso-spacerun: yes;">&nbsp; </span></span></span><br /><br /><span style="font-family: inherit; font-size: 12pt;"><em>When You don’t Need to Clear the Master</em></span><br /><br /><span style="font-size: 12pt;"><span style="font-family: inherit;">New Recordings: If you are producing a concert video, that is, an audiovisual recording of a live performance of musicians playing various songs, you don’t need to secure a “master use” license. That’s because as the producer of the recording you are in effect creating new masters of the songs.</span></span></div><div class="MsoNoSpacingCxSpMiddle" style="margin: 1em 0px;"><span style="font-family: inherit; font-size: 12pt;">Re-records: Also, if you re-record a song, you will not have to clear the original master. Suppose you hire a singer to perform “Walk on By” for your TV commercial. You will need a synch license to use the underlying musical composition written by Bacharach and David. But you will not have to contact Columbia Records or Sony Music. They would have no interest in your new recording of the song. &nbsp;&nbsp;&nbsp;</span></div><div class="MsoNoSpacingCxSpMiddle" style="margin: 1em 0px;"><span style="font-family: inherit; font-size: 12pt;">Footage: Finally, if you use audiovisual footage of a performer singing a song, as discussed above, you will have to secure a synch license in a song. But if the owner of the footage is not the record company you will not have to get the record company’s permission. However, you will have to secure a license to use the footage including the recording embodied in the footage. Suppose for instance you wish to use footage of the Beatles performing “I Want to Hold Your Hand” on the Ed Sullivan show. You would have to clear the song. In this case written by Lennon McCartney and controlled by Sony ATV but instead of securing rights from a record company, you would have to get a “footage license” from the owners of the Ed Sullivan show.</span><br /><br /><span style="font-family: inherit; font-size: 12pt;"><em>Footage Licenses</em></span><br /><br /><span style="font-family: inherit; font-size: 12pt;">The rest of this chapter will be devoted to standard terms and business practices for licensing songs and masters for various projects. But often my clients, especially those who make documentaries and sometimes feature movies, TV shows, installations and exhibits and even musical theatre, will wish to use footage of musical performances rather than the original master recordings produced by record companies. Footage licenses are much simpler and more straightforward compared to licensing songs and masters, but they can also be much more expensive.</span><br /><br /><span style="font-size: 12pt;"><span style="font-family: inherit;">As we shall discuss, the business practices and standard terms for licensing songs and masters varies depending on the particular project. For instance, the terms applicable to documentaries and movies are vastly different. But footage licenses are generally structured as “buy-outs” for all media for a period of years. Often the term is ten years but some owners insist on a shorter term and other charge a premium for perpetuity. The fee payable usually depends on the source of the footage and the amount of footage required. For example, use of major motion picture footage could be from $6,000 to as high as $10,000 or more, for just one minute, although discounts may be available for using 30 seconds or less. Licensing archival footage from TV news organizations can range from $50 to $100 a second.<span style="mso-spacerun: yes;">&nbsp; </span>Licensing footage from old TV series featuring music such Soul Train, Dick Clark or the Ed Sullivan show, also varies from owner to owner. Generally the price is fixed by that company’s rate card and varies depending on timing. However, discounts can sometimes be obtained by limiting the media to one form of release, such as use of the footage only in a monitor during a theatrical performance.<span style="mso-spacerun: yes;">&nbsp;</span></span></span><br /><span style="font-size: 12pt;"><span style="font-family: inherit;"><span style="mso-spacerun: yes;"></span></span></span><br /><span style="font-size: 12pt;"><span style="font-family: inherit;"><span style="mso-spacerun: yes;">F</span></span></span><span style="font-family: inherit; font-size: 12pt;">inally, certain clearing TV and film footage may require securing approvals from actors appearing in the footage and/or musicians performing in the footage, and guilds such as AFTRA, AFofM, DGA and WGA. There are experts who specialize in this area of clearances. </span><br /><br /><span style="font-size: 12pt;"><span style="font-family: inherit;"><em>Labels’ Blocking Rights</em> </span></span><br /><br /><span style="font-family: inherit; font-size: 12pt;">There is a caveat that should be noted about releasing products with your own recordings of songs or using footage containing music. Although the labels would not own the recordings of these songs (unless they owned footage such as promo videos), they still may have “blocking rights.” In any standard contract between an artist and a label, the label generally acquires the exclusive right to distribute any recordings that an artist makes during the term, whether or not coupled with a visual image, “for home or personal use.” This is one of the core provisions of any standard recording agreement. If an artist or any third party distributed records of videos featuring the artist, the record companies would lose a core source of income as those records would compete with the label’s records. Therefore, producers have to be careful about releasing the products as CDs, DVDs or downloads, if the artist involved is signed to a label. Even if the artist consents, the labels would still have a cause of action known as “interference with contract.” </span><br /><br /><span style="font-family: inherit; font-size: 12pt;">One example of how blocking rights work in practice occurred when I worked in Business Affairs at Sony Music. MTV recorded a series of shows called “Unplugged” featuring acoustic performances of such artists as Mariah Carey or Bob Dylan. They would not release DVDs of the shows because Sony enjoyed blocking rights in the home video release of any programs featuring musical performances of these artists who were signed to Sony Music.<span style="mso-spacerun: yes;">&nbsp; </span>Ultimately we would work out deals with MTV to acquire the home video rights ourselves.</span><br /><br /><span style="font-family: inherit; font-size: 12pt;"><em>Public Domain</em></span><br /><br /><span style="font-family: inherit; font-size: 12pt;">If you want to use classical music in you movie, the underlying music may well be Public Domain, for instance, anything by Mozart or <span style="background: white;">Beethoven<strong>.</strong></span> See Chapter 1 for the duration of copyright. However a particular recording of the music may still be protected by copyright and<span style="mso-spacerun: yes;">&nbsp; </span>in that case, the producer will only have to clear the master but not the musical work. As a rule of thumb songs published in the U.S. prior to 1923 are in the Public Domain, but records that are even older may still be protected by state statutory or common law.<span style="mso-spacerun: yes;">&nbsp; </span>For tips on identifying PD songs see research techniques below.</span><br /><br /><span style="font-family: inherit; font-size: 12pt;"><em>Special Rules for Public Broadcast Stations are Favorable for Producers</em></span><br /><br /><span style="font-family: inherit; font-size: 12pt;">The Copyright Act provides for special rules for use of copyrighted materials, including music, on public broadcasting stations. Generally, producers are not obligated to clear songs or masters for programs produced for PBS or other public broadcasting stations as defined in the act. The relevant sections of the act are 114 and 118.</span><br /><br /><span style="font-family: inherit; font-size: 12pt;">In regard to songs, Section 118 provides for a statutory license subject to federally prescribed rates. PBS, on the producers’ behalf—with funding from the Corporation for Public Broadcasting—will pay the federally prescribed fees to the copyright owners. But Section 118 does not provide for a statutory license with respect to the use of the songs in the home-video distribution of the program, for foreign TV or theatrical release. Therefore, producers have to acquire synch licenses for these uses.</span><br /><br /><span style="font-family: inherit;"><span style="font-size: 12pt;">In regard to masters, Section 114(b) reads in relevant part:&nbsp;</span>&nbsp;</span></div><div class="MsoNoSpacingCxSpMiddle" style="margin: 1em 0px;"><span style="font-family: inherit;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</span><span style="font-family: inherit;">&nbsp; The exclusive rights of the owner of copyright in sound record... do not apply to </span><br /><span style="font-family: inherit;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; sound&nbsp;recordings included in the educational television and radio programs... </span><br /><span style="font-family: inherit;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;distributed or transmitted by or through public broadcasting entities... provided </span><br /><span style="font-family: inherit;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;that copies or phonorecords of said programs are not commercially distributed by or </span><br /><span style="font-family: inherit;"><span style="font-family: inherit;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;through public broadcasting entities to the general public.</span> </span><br /><br /><span style="font-size: 12pt;"><span style="font-family: inherit;">Therefore, no payment is required for use of masters in programs on public television. But note that the last sentence quoted above <span style="letter-spacing: 0.05pt;">means that if the program is released as a DVD, the producer <span class="bodyitals"><span style="mso-ansi-font-size: 12.0pt; mso-bidi-font-size: 12.0pt;"><em>will</em></span></span>have to secure master-use licenses if music from records was used in the program.</span></span></span><br /><br /><span style="font-family: inherit; font-size: 12pt;"><em>Charitable Projects</em></span><br /><br /><span style="font-size: 12pt;"><span style="font-family: inherit;">Occasionally I clear music for projects produced by not-for-profit organizations for a charitable purpose. Two examples of such projects are a song heard in the background of a public service announcements intended to raise money for shelter for homeless animals, and a concert produced by a not-for-profit designed to raise money for people who were victims of a particular natural disaster. Keep in mind while reading through below, especially in the sections for advertising and concert videos, that it may be possible to secure reduced rates for such projects. In fact, I was able to secure a gratis license for a very commercially successful song in the PSA, and vastly reduced rates for TV re-broadcast of the concert program.<span style="mso-spacerun: yes;">&nbsp;&nbsp; </span></span></span><br /><br /><span style="font-family: inherit; font-size: 12pt;"><em>Most Favored Nations</em></span><br /><br /><span style="font-family: inherit; font-size: 12pt;">Most Favored Nations (“MFN”), in the context of music clearances, refers to the notion that all copyright owners should be treated equally. If you grant more favorable terms to one copyright owner over others for a particular project, like music in documentary, you must grant the same terms to other copyright owners.<span style="mso-spacerun: yes;">&nbsp; </span>For instance, if you offer to pay Party A $1 and they agree to $1, but Party B insists on $2 and you agree to pay B $2, you have to pay Party A an extra dollar. However, it is essential to recognize that MFN is not a statute and<span style="mso-spacerun: yes;">&nbsp; </span>is not required by any legal case. Instead it is a contract provision. If a copyright owner wants it, they must include it in their license. If an MFN clause is not included in a copyright owner’s license, then there is no duty to provide MFN treatment to that party. Here is a typical MFN clause from a license for use of a song in a documentary program:</span><br /><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Most Favored Nations (“MFN”): In the event Licensee grants more favorable terms </span><span style="font-size: 12pt;"></span><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;including, without limitation, additional consideration in any form, to the co-publisher </span><span style="font-size: 12pt;"></span><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; of any Composition(s) licensed hereunder, the party(ies) granting rights to use the </span><span style="font-size: 12pt;"></span><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;master recording(s) thereof, or any third party licensing the right to use any musical </span><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; composition and/or master recording in the Program for similar use and duration as </span><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; granted herein for the Composition(s), Licensee shall notify Licensor thereof, and this </span><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Agreement shall be deemed amended to incorporate same as of the date when such </span><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; higher fee is paid or such more favorable terms are granted to such third party, and to </span><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;continue for the duration of the period which such more favorable terms are granted.</span><br /><br /><span style="font-family: inherit; font-size: 12pt;">You usually find these types of clauses not only in documentaries but also in other projects in which songs are used in a similar manner, such as a concert program where most songs are used are played in their entirety by a band or single artist</span><br /><br /><span style="font-family: inherit; font-size: 12pt;">If you read the clause carefully it not only applies to co-publishers of the same song and to the master, if any embodying the song, it also applies to every other song or master in the program “for similar use and duration.” Since all the songs and masters in most documentaries are usually similar, that is a brief excerpt of the music, under this provision if you were to pay more for any other song or master in the program, you would have to pay the same money for the song(s) subject to the license including this clause. </span><br /><br /><span style="font-family: inherit; font-size: 12pt;">However, with respect to the use of a song in a TV spot or ad, the MFN clause is usually limited to the co-publisher or the master embodying the song. For instance, if you wanted use 30 seconds of a Madonna song that she co-wrote with another songwriter, you would have to promise Madonna’s publisher that you would treat them just as well as their co-publisher (in case the other writer is represented by another publisher), and at least as well as record company that controls the master.<span style="mso-spacerun: yes;">&nbsp; </span>You can expect the same clause from the record company that owners the master. The MFN is limited in this way because there is usually only one song or master in any TV spot. </span><br /><br /><span style="font-family: inherit; font-size: 12pt;">For feature movies there may be more than one song, but the MFN clause will usually limit MFN to the particular master embodying that song, not all other songs in the movie. Here is a typical example of an MFN clause for use of a song in a movie, it’s from the same publisher as the prior quoted MFN clause:</span><br /><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Most Favored Nations: In the event Licensee grants more favorable terms including, </span><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;without limitation, additional consideration in any form, to the co-publisher(s) of the </span><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Composition or the party granting rights to use the master recording thereof (if </span><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;applicable) in the Motion Picture, Licensee shall notify Licensor thereof, and this </span><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Agreement shall be deemed amended to incorporate same as of the date when such </span><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; higher fee is paid or such more favorable terms are granted to such third party, and to </span><br /><span style="font-size: 12pt;"><span style="font-family: inherit;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; continue for the duration of the period which such more favorable terms are granted.<span style="mso-spacerun: yes;">&nbsp; </span></span></span><br /><br /><span style="font-family: inherit; font-size: 12pt;">Under this MFN provision, the producer must provide equal treatment only to other copyright owners of the song (i.e., co-publishers) and to the copyright owner of the masters.</span><br /><br /><span style="font-family: inherit;"><span style="font-size: 12pt;">The MFN clause in a movie license is usually limited in this way because the publisher is recognizing the business practice of paying a popular song more money in a feature movie than an obscure song. The business practice also recognizes that a song used over the credits should be paid more money than a brief excerpt in the background of a scene. In other words there are many variables that go into calculating a fair amount to pay for a song in a movie; it would be unfair and unreasonable to pay all the songs the same. </span><span style="font-size: 12pt;">However, I have never seen an MFN clause for a song that did not at least require the same treatment as the terms applying to any master. In other words, the publishers always want to be paid at least as much as the record company, and vice versa.</span></span><br /><br /><span style="font-family: inherit; font-size: 12pt;"><em>Approvals</em></span><br /><br /><span style="font-family: inherit; font-size: 12pt;">Generally both music publishing and recording agreements provide that the publisher and the labels, as the case may be, has the exclusive right to grant synch or master use licenses and that they have the right to do so without the approval of the writer or the artist. A standard exclusion includes programs that are “indecent” and commercials for certain products such as feminine hygiene. However, often a publisher and a label will go back to the writer or the artist (or their estates, if they are deceased) out of courtesy and to maintain a good relationship. Copyright owners will rarely tell you whether they are legally required to secure the creators’ permission, and will usually only let you know that the song or master is “out for approval,” and rarely tell you exactly who the “approver” is.</span><br /><br /><span style="font-size: 12pt;"><span style="font-family: inherit;"><em>Credits</em></span></span><br /><br /><span style="font-size: 12pt;"><span style="font-family: inherit;">Generally, a written quote stating fees for the use of a song or master in a project will provide the credits that should be listed for the credits of a TV show, feature film, or documentary. A publisher such as SONY ATV (EMI Music’s catalogue) may be the copyright owner but the credit may be more involved due to contractual obligations to the original publisher, catalogue or writer. For instance, the song credit for “Let’s Get it On:”<span style="mso-spacerun: yes;">&nbsp; </span></span></span></div><div class="MsoNoSpacingCxSpMiddle" style="margin: 1em 0px;"><span style="font-size: 12pt;"><span style="font-family: inherit;"><span style="mso-tab-count: 1;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>“Let’s Get It On” by Marvin Gaye, Ed Townsend</span></span></div><div class="MsoNoSpacingCxSpMiddle" style="margin: 1em 0px;"><span style="font-size: 12pt;"><span style="font-family: inherit;"><span style="mso-tab-count: 1;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Courtesy of EMI [Jobete Music Co. Inc. (ASCAP), Stone Diamond Music Corp. (BMI)]</span></span></div><div class="MsoNoSpacingCxSpMiddle" style="margin: 1em 0px;"><span style="font-family: inherit; font-size: 12pt;">The credit for the recording, which was originally released by Motown and subsequently acquired by Universal Music would be </span></div><div class="MsoNoSpacingCxSpMiddle" style="margin: 1em 0px;"><span style="font-size: 12pt;"><span style="font-family: inherit;"><span style="mso-tab-count: 1;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Performed by Marvin Gaye</span></span></div><div class="MsoNoSpacingCxSpMiddle" style="margin: 1em 0px;"><span style="font-size: 12pt;"><span style="font-family: inherit;"><span style="mso-tab-count: 1;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Courtesy of Motown Records under license from Universal Music Enterprises</span></span></div><div class="MsoNoSpacingCxSpMiddle" style="margin: 1em 0px;"><span style="font-size: 12pt;"><span style="font-family: inherit;">The licenses, when they eventually arrive, will require these credits be used in the project.<span style="mso-spacerun: yes;">&nbsp; </span></span></span></div><div class="MsoNoSpacingCxSpMiddle" style="margin: 1em 0px;"><span style="font-family: inherit; font-size: 12pt;"><em>Public Performance Licenses &amp; Cue Sheets</em></span><br /><br /><span style="font-family: inherit; font-size: 12pt;">As discussed<span style="mso-spacerun: yes;">&nbsp; </span>in Chapter 1, owners of copyrighted works, including musical compositions, enjoy the exclusive right to publicly perform their copyrights. Generally, though, music clearances does not involve securing the right of public performance. The reason is that TV stations and established video on demand services such as Amazon are already licensed by the PROs, ASCAP, BMI and SESAC in the U.S. They pay these organizations for the public performance of the music in the movies and TV when they are broadcast or transmitted on the Web. But the PROs have to know what music is being used in which movie, TV show, or TV ad campaign. To implement this system, the publishers require producers to deliver “cue sheets.” </span><br /><br /><span style="font-family: inherit;"><span style="background: white; color: #111111; font-size: 12pt;">A cue sheet is a </span><span style="background: white; font-size: 12pt;">document created by the production company which lists all music used within a television program, special or movie. It includes song title, writer and publisher information, song duration and use type. The producer is required to prepared cue sheets for the publisher. Here is a typical clause:</span></span><br /><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cue Sheet: It is a material condition and requirement of this Agreement that </span><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Licensee&nbsp;shall provide Licensor with a cue sheet of the Program as soon as </span><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; practicable, but no later&nbsp; than sixty (60) days following the first broadcast of the</span><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Program.</span><br /><br /><span style="font-family: inherit;"><span style="background: white; font-size: 12pt;">The publisher submits the cue sheet to the relevant PRO so that every time the movie or TV program is broadcast, the publishers and writer get credit for their performance. </span><span style="font-size: 12pt;">Without cue sheets, it would be nearly impossible for composers and publishers to be compensated for their work. An example of an accurately filled out cue can be found in the “Creators” section of the BMI website.</span></span><br /><br /><span style="font-family: inherit; font-size: 12pt;"><em>Research Techniques</em></span><br /><br /><span style="font-size: 12pt;"><span style="font-family: inherit;">There are various data bases that music clearance specialists use to identify the copyright owners of songs and masters. The PROs, ASCAP, BMI and SESAC all list the publishers and writers of all the songs in their repertoire data bases. Harry Fox provide Songfile.com which lists songs represented by Fox including publishes and writers. There are also books that may be helpful especially regarding songs that may be in the public domain. One such book is <i style="mso-bidi-font-style: normal;">Variety Music Cavalcade</i> <i style="mso-bidi-font-style: normal;">1620-1969</i> by Julius Mattfeld (Prentice Hall 1971). Another resource in identifying PD songs is www.pdinfo.com. AllMusic and yes, Wikipedia, can also be helpful in identifying record labels that control records. In certain cases it may be advisable to do a search of the copyrights office to identify. Recent copyright registrations can be found on the Copyright Office’s website. Those prior to 1978 must be examined in person t\at the Library of Congress. There are a variety of experts and firms that that will perform such a search at reasonable hourly rates.<span style="mso-spacerun: yes;">&nbsp;</span></span></span><br /><br /><span style="font-family: inherit; font-size: 12pt;"><em>What if You Can’t Find the Copyright Owner</em></span><br /><br /><span style="font-family: inherit; font-size: 12pt;">But what if you can’t find the publisher for a given song? Well, that song MAY be public domain. There are various websites that provide lists of PD songs. If a song was published prior to 1923, then it is in the public domain. There are certain resources for determining the publication of song such as <i style="mso-bidi-font-style: normal;">Variety Music Cavalcade</i> (Prentice Hall). Sometimes searching the Copyright Office’s records for old songs is appropriate. The copyright office’s website only goes back to 1978. But there are various firms that can perform searches of the Copyright Office’s written records for a reasonable fee.<span style="mso-spacerun: yes;">&nbsp; </span>A record may still be protected by copyright even if it was released prior to 1923 (see Chapter 1). If a song or master cannot be confirmed as PD, and you cannot determine the copyright owner after performing “due diligence” the chances of a copyright owner filing a complaint is relatively small, BUT you are not insulated from potential liability. There has been proposed legislation that would amend the Copyright Law to eliminate or reduce the penalties for copyright infringement of “orphan works,” but no such proposals have been adopted into law. At this point you should consult with a copyright attorney to access the legal and business risks of using such a song or master. </span><br /><br /><span style="font-family: inherit; font-size: 12pt;"><strong>MOVIES </strong></span><br /><br /><span style="font-family: inherit; font-size: 12pt;"><em>Standard Terms and Practices</em></span><br /><br /><span style="font-family: inherit; font-size: 12pt;">The standard practice for licensing music for movies is to separate the right to use the music into two categories: </span><br /><br /><span style="font-family: inherit;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <span style="font-size: 12pt;">1. Festival Rights</span></span><br /><br /><span style="font-family: inherit;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <span style="font-size: 12pt;">2. Broad Rights </span></span><br /><br /><span style="font-family: inherit; font-size: 12pt;">Festival Rights generally gives the producer the right to show the movie at movie festivals such as Sundance or Tribeca Film Festival. Broad Rights mean the right to use the movie in all media throughout the world in perpetuity.</span><br /><br /><span style="font-family: inherit; font-size: 12pt;">Naturally Broad Rights are much more expensive than Festival Rights. Festivals generally do not compensate filmmakers except with promotion. Instead, festivals are the principal means for an independent movie to gain distribution. Therefore, producers should request Festival Rights with an <i style="mso-bidi-font-style: normal;">option</i> for Broad Rights. In that way, in case the movie does not pick up distribution the producer will not have to pay for Broad Rights. </span><br /><br /><span style="font-family: inherit; font-size: 12pt;">Notwithstanding the above, if a producer does not expect to distribute the movie in all media, she can ask for Festival Rights with options for the specific media that she thinks she will be able to get a deal. For instance, if she does not expect to gain theatrical distribution but thinks she may a home video deal or distribute physical units herself or use Amazon to deliver downloads, she can just ask for an option for home video including DVDs and downloads. The option for home video will naturally be less expensive than Broad Rights.<span style="mso-spacerun: yes;">&nbsp; </span>I had a client who did precisely this and we saved money by limiting the option to home video. However, a producer could ask for options for various rights including all the rights adding up to Broad rights; this will give him maximum leeway to distribute the movie without over spending.</span><br /><br /><span style="font-family: inherit; font-size: 12pt;"><em>Price</em></span><br /><br /><span style="font-family: inherit; font-size: 12pt;">The price of clearing music for movies will be primarily determined by three factors:</span><br /><br />&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <span style="font-family: inherit;"><span style="font-size: 12pt;">1. Whether the movie is an “indie” production or a studio picture.</span></span><br /><span style="font-family: inherit; font-size: 12pt;"></span><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The identity of the song and master</span><br /><br />&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <span style="font-family: inherit; font-size: 12pt;">3. The kind of use that is made of the music in the movie</span><br /><br /><span style="font-family: inherit; font-size: 12pt;">Whether a film is an indie picture or a high budget studio feature is key because copyright owners recognize the budgets of most indie features are modest compared to a studio production.<span style="mso-spacerun: yes;">&nbsp; </span>Often the copyright owner will inquire what the budget for movie in calculating a fair price. </span><br /><br /><span style="font-family: inherit;"><span style="font-size: 12pt;">Another factor, and just as important is the identity of the music you wish to use. A monster hit by the Rolling Stones is probably going to cost a great deal more than an obscure song.<span style="mso-spacerun: yes;">&nbsp; </span>Most copyright owners will want a synopsis of the movie and as well as a scene description. And the owners of many commercially successful songs are protective of their copyrights and will not license the song unless they approve of the subject matter of the movie and the way the music is used in the movie. It’s important to keep in mind that a copyright owner can deny permission to use a song or master for any reason and they are not obligated to tell you why. </span><span style="font-size: 12pt;">The way the music is included in the movie will also be a factor in pricing, although usually far less important than the first two factors. Generally, use of music over the opening or closing credits will be more expensive than using a price of music in the body of the movie itself. Also a foreground use will be more valuable than a background use. A foreground use is when a character in the movie is seen performing the music. A background use means that. In addition, if a price of music is used multiple time in a movie will increase the price, and the copyright owner may want the same fee for each use. This factor is more important when negotiating rights for a big budget movie where one use of a popular song can easily reach six figures. If the song is used over the credits, the price can dramatically increase.<span style="mso-spacerun: yes;">&nbsp; </span></span></span><br /><br /><span style="font-family: inherit; font-size: 12pt;">Notwithstanding all the above factors, if the producer wants music by emerging songwriter or artist, the price can be absolutely free. Sometimes they just want the credit and to include it in their resume. But the price of securing Broad Rights for a song that has had a commercial success or was written by well-known writer may range from five thousand to $25,000. On the other hand, the good news is that, generally, copyright owners will license Festival Rights for about $500. This is the quote I recently received for a song by a well-known songwriter that was used in the background of an indie picture, played at last year’s Sundance film festival:</span><br /><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Festival use: $500 for one year world</span><br /><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Option for Broad rights: Flat fee of $10,000 for worldwide broad rights. </span><br /><br /><span style="font-family: inherit;">&nbsp;<span style="font-size: 12pt;">If the picture was a major studio production the cost would have probably been significantly higher.</span></span><br /><br /><span style="font-family: inherit; font-size: 12pt;"><em>Step Deals</em></span><br /><br /><span style="font-family: inherit; font-size: 12pt;">Sometimes copyright owners will structure their quotes as “Step deals.” This means the price will ultimately depend on the financial success of the movie. The following was a quote a received for another indie movie as the example about for a similar piece of music also used in the background:</span><br /><br /><span style="font-size: 12pt;"><span style="font-family: inherit;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>RIGHTS:</u></span></span><br /><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Film Festival/One (1) year/ World $500</span><br /><br /><span style="font-family: inherit;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<span style="font-size: 12pt;"><u>OPTION</u></span></span><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span><br /><span style="font-family: inherit; font-size: 12pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; All Media Broad Rights Step Deal:</span><br /><br /><span style="font-family: inherit;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<span style="font-size: 12pt;">Media: All media now known or hereafter devise</span></span><br /><span style="font-family: inherit;">&nbsp;&nbsp;&nbsp; </span><br /><span style="font-family: inherit;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<span style="font-size: 12pt;">Initial Fee: $2500</span></span><br /><br />&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <span style="font-family: inherit;"><span style="background: white; font-size: 12pt;">With Steps of $2000 at $3M, $5M, $8M, $10M, $12M and $15M worldwide</span></span><br />&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<span style="background: white; font-family: inherit; font-size: 12pt;">gross&nbsp;receipts based in ALL forms of exploitation&nbsp;(including but not limited to</span><br />&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <span style="background: white; font-family: inherit; font-size: 12pt;">theatrical, all<span style="mso-tab-count: 1;">&nbsp;</span>videograms/DVD, all TV media, and Internet streaming and</span><br />&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <span style="background: white; font-family: inherit; font-size: 12pt;">downloading).</span><br /><br /><span style="font-size: 12pt;"><span style="font-family: inherit;"><em>MFN’s Application to Feature Movies</em> </span></span><br /><br /><span style="font-family: inherit; font-size: 12pt;">A record company will usually insist on MFN treatment with the owners of the song embodied in the master. The music publisher of a song will also usually insist on MFN treatment with the owner of the master of that song. As discussed previously in this chapter, producers can usually avoid MFN treatment between different songs and masters. Both labels and publishers recognize that the use of a song or master over the credits, for example, is much more important and therefore should be more expensive than other uses of music in the movie. It is just as well recognized that the use of&nbsp;monster pop hit such as a classic Rolling Stones song is a lot more valuable than a song by an unknown artist.</span><br /><br /><span style="font-family: inherit; font-size: 12pt;"><em>Trailers: In-context out-of-context, and other promotions</em></span><br /><br /><span style="font-family: inherit; font-size: 12pt;">Generally, but by no means in all cases, if a copyright owner grants Broad Rights in a song or master, they will provide a gratis license to the producer to use that music to advertise the movie but only “in-context.” In-context means use of the music as it is used in the movie itself. Generally use of the music in a way that it is not used in the movie will be for an additional fee. So for instance, if you were to use 20 seconds of the music in a scene of the movie but wanted to make a 4 minute trailer using the entire song, a separate fee would have to be negotiated.</span><br /><br /><span style="font-family: inherit; font-size: 12pt;"><em>Relationships&nbsp;and&nbsp;the Clearance Process</em></span><br /><br /><span style="font-size: 12pt;"><span style="font-family: inherit;">In clearing music for movies or any other projects, a producer should try to use any personal relationships they have with writers or artists. Of course if the writer or artist is already represented by a music publisher or label, it may not be up to songwriter or artist to decide. However, it’s important to note that the clearance person you use may have an impact as well. I have a good relationship with a company that represented both the publishing and recording of a famous artist/songwriter. Recently I represented a producer who wanted to use a song written and recorded by the same person. The budget for the movie was less than a million dollars and generally a song by this famous artist could not be licensed for less than 6 figures. But based on the relationship I was able to secure a gratis license and the amount that my client could afford was so small that it was irrelevant to this company.<span style="mso-spacerun: yes;">&nbsp; </span></span></span></div><!--[if !supportAnnotations]--><span style="font-family: inherit;"> <!--[endif]--> </span>Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com0tag:blogger.com,1999:blog-3486088391463104302.post-26226027853488966162014-03-12T11:42:00.003-07:002014-03-12T11:57:33.726-07:00HOW A JAZZ CLUB IS USING THE INTERNET TO REACH A WORLDWIDE AUDIENCE & CREATE NEW REVENUE STREAMS FOR THE ARTISTS WHO PLAY THERE<br /><div align="center" class="MsoNormal" style="margin: 0in 0in 0pt; text-align: center;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-fareast-font-family: &quot;Times New Roman&quot;;">INTERVIEW WITH SPIKE WILNER, JAZZ PIANIST AND CO-OWNER OF SMALLS JAZZ CLUB IN NYC<o:p></o:p></span></b></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="background: white;"><o:p><span style="font-family: Cambria;">&nbsp;</span></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="color: #222222; mso-fareast-font-family: &quot;Times New Roman&quot;;"><span style="font-family: Cambria;">Spike Wilner is an accomplished jazz pianist and the co-owner of Smalls Jazz Club in New York City's Greenwich Village. He also has been using the Internet to expose the artists who play at Smalls and their music to a worldwide audience by simulcasting live shows every night (click on “live video” at <a href="http://www.smallsjazzclub.com/">www.smallsjazzclub.com/</a>). In addition, over seven years ago he started creating an archive of recordings of the live music performed at the club, and plans to all fans to listen to any show for a small subscription fee which he will share with the artists. This interview provides Spike's experience with expanding Smalls' audience by using the Internet, what he plans to do next, and his vision of the future.&nbsp;<o:p></o:p></span></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="background: white; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p></o:p></span><br /></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;"><span style="background: white; color: #222222; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">SG <span style="mso-spacerun: yes;">&nbsp;</span>Please give a thumbnail sketch of your career as a jazz pianist and entrepreneur.</span></b><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p></o:p></span></b></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">I went to the New School for Social Research and was part of an experimental music program led by the legendary Arnie Lawrence.<span style="mso-spacerun: yes;">&nbsp; </span>In this small exclusive school I met many of my peers who, to this day, are at the top of our field.<span style="mso-spacerun: yes;">&nbsp; </span>Many great musicians were in my class including Brad Mehldau and John Popper from the Blues Travelers (who started the band at our school).<span style="mso-spacerun: yes;">&nbsp; </span>After graduating I made my living playing any little gig I could – restaurants and bars, solo piano and private parties.<span style="mso-spacerun: yes;">&nbsp; </span>In the early 1990’s, New York still had quite a few nice places to play and dozens of dives where you could play (and not make too much dough) but it was a great vibe.<span style="mso-spacerun: yes;">&nbsp; </span>I did some touring, notably with Maynard Furgeson and also Artie Shaw’s big band which was led at that time by clarinet great Dick Johnson.<span style="mso-spacerun: yes;">&nbsp; </span>It was during this time that I also began to put pianos into bars that didn’t have one.<span style="mso-spacerun: yes;">&nbsp; </span>My deal was this: I bought a cheap piano and, at my expense, put it into the bar.<span style="mso-spacerun: yes;">&nbsp; </span>In exchange I got 2 or 3 nights to do a gig there with my band.<span style="mso-spacerun: yes;">&nbsp; </span>We agreed on some regular amount of pay and dinner included.<span style="mso-spacerun: yes;">&nbsp; </span>The other nights of the week the bar had the right to use the piano in any way they wanted.<span style="mso-spacerun: yes;">&nbsp; </span>I did this successfully in about 4 different spots that all became Jazz hangs.<span style="mso-spacerun: yes;">&nbsp; </span>I guess in this way I lay the seeds for my future as a club owner.</span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">In 1994 Smalls Jazz Club was opened by Mitchell Borden.<span style="mso-spacerun: yes;">&nbsp; </span>I began to play there within the first few weeks of the club’s opening.<span style="mso-spacerun: yes;">&nbsp; </span>Mitch booked and ran the club nearly on his own.<span style="mso-spacerun: yes;">&nbsp; </span>I became embroiled in the fabric of the club, which was a simmering pot of young musicians, staying up all night and morning, playing and practicing Jazz and also indulging in licentious behavior, as is normal for musicians.<span style="mso-spacerun: yes;">&nbsp; </span>This lasted until 2002 when the club finally closed and Mitchell went bankrupt.<span style="mso-spacerun: yes;">&nbsp; </span>In post 9/11 New York, the rent went through the roof.<span style="mso-spacerun: yes;">&nbsp; </span>The original Smalls had an $800/month rent.<span style="mso-spacerun: yes;">&nbsp; </span>Now it went to $8000, so Smalls closed down.<span style="mso-spacerun: yes;">&nbsp; </span>Afterwards, the space was bought and converted into a Brazilian bar. <span style="mso-spacerun: yes;">&nbsp;</span>After Smalls closed I was so distraught that I left the U.S and started spending a lot of time in Europe and worked in Paris.<o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">In 2006 I decided to go back to school and went to SUNY for my Masters degree.<span style="mso-spacerun: yes;">&nbsp; </span>I was the oldest student there but my idea was to get a teaching job.<span style="mso-spacerun: yes;">&nbsp; </span>At the end of the year I got word from Mitch that the Brazilian guy wanted to sell the bar.<span style="mso-spacerun: yes;">&nbsp; </span>I knew it was a great chance and so I mortgaged my apartment and bought Smalls.<span style="mso-spacerun: yes;">&nbsp; </span>Originally I had a partner with me, an old college friend. <span style="mso-spacerun: yes;">&nbsp;</span>But things got difficult and we decided to split.<span style="mso-spacerun: yes;">&nbsp; </span>I made Mitch honorary partner and we dedicated ourselves to resurrecting Smalls with the same spirit of musician community and musical growth as the original.<span style="mso-spacerun: yes;">&nbsp; </span>We also wanted it to be a listening room where people could really listen and participate in this great art form.<span style="mso-spacerun: yes;">&nbsp; </span>It’s now seven years since I’ve become partner and manager of Smalls.</span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;"><span style="background: white; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"></span></b>&nbsp;</div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;"><span style="background: white; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">SG Give us a brief description of what happens at Smalls, that is, the music and the artists featured there and what folks can expect if they visit the club.</span></b><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p></o:p></span></b></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Smalls Jazz Club is generally open from 4:00 PM to 4:00 AM, with some exceptions.<span style="mso-spacerun: yes;">&nbsp; </span>Normally we have 3 bands per night.<span style="mso-spacerun: yes;">&nbsp; </span>We do two, two-set shows and then an “afterhours” set and then a jam session at the very end.<span style="mso-spacerun: yes;">&nbsp; </span>Jam sessions are an important part of Smalls and there’s traditionally a jam every night of the week quite late (sometimes not even starting until 2:00 AM).<span style="mso-spacerun: yes;">&nbsp; </span>We also have afternoon jam sessions on Friday and Saturday.<span style="mso-spacerun: yes;">&nbsp; </span>On Wednesday in the afternoon we host a tap dance jam session and the tap community comes out for that.<span style="mso-spacerun: yes;">&nbsp; </span>On Wednesday and Thursdays we do a 9:30 PM “main show” which usually feature an important or famous musician or band. The same on the weekend but it starts at 10:30 PM.<span style="mso-spacerun: yes;">&nbsp; </span>Our “afterhours” shows start either around midnight or 1 AM and are all seasoned veteran players hosting.<span style="mso-spacerun: yes;">&nbsp; </span>Sundays we are open all day with a vocal workshop at 1PM, a showcase show at 4PM, a duet show at 7:30 PM and then at 10PM we have the legendary Johnny O’Neal who is in a permanent residence with his trio.</span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Smalls has a “no reservation” policy, first come first serve.<span style="mso-spacerun: yes;">&nbsp; </span>Our cover is $20 until afterhours and then it’s $10.<span style="mso-spacerun: yes;">&nbsp; </span>We have a one-drink minimum for those seated or at the bar but standers in the back don’t have to buy a drink.<span style="mso-spacerun: yes;">&nbsp; </span>It gets crowded and the vibe changes as it gets later.<span style="mso-spacerun: yes;">&nbsp; </span>The afterhours is the coolest vibe and not for everyone.<span style="mso-spacerun: yes;">&nbsp; </span>But the music is always great at Smalls, from the beginning of the day to the end.</span></div><br /><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;"><span style="background: white; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">SG You have been experimenting for some time now with harnessing the power of the Internet to create a broader audience for the music and artists who play at Smalls. Y<span style="color: #222222;">ou are now simulcasting every show at Smalls on the Web. Tell us more about your live simulcast including how you implement it, how many people are tuning in and the feedback you have been getting from fans and the artists themselves</span></span></b><span style="background: white; color: #222222; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">. &nbsp;&nbsp;</span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="background: white; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"></span><br /></div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">I remember in my Jazz history that John Hammond, the great record producer, was driving to Chicago when he picked up a radio broadcast live from a Jazz club in Kansas City.<span style="mso-spacerun: yes;">&nbsp; </span>The music blew his mind and he turned his car around and drove to Kansas City to sign whomever the artist was.<span style="mso-spacerun: yes;">&nbsp; </span>It turned out to be Count Basie and the rest is history.<span style="mso-spacerun: yes;">&nbsp; </span>What fascinates me about that story is the idea of a club putting a radio wire to transmit to the world.<span style="mso-spacerun: yes;">&nbsp; </span>I wanted to do this and used the Internet.<span style="mso-spacerun: yes;">&nbsp; </span>We started live streaming about seven years ago with a very simple system.<span style="mso-spacerun: yes;">&nbsp; </span>As the years progressed, the technology for live streaming has grown in leaps and bounds.<span style="mso-spacerun: yes;">&nbsp; </span>Now it’s possible for anyone to very inexpensively create their own “television studio”.<span style="mso-spacerun: yes;">&nbsp; </span>We began to generate an enormous audience world wide, with Jazz fans checking in from literally all parts of the globe.<span style="mso-spacerun: yes;">&nbsp; </span>I was in Italy last year and it shocked me how famous Smalls has become internationally.<span style="mso-spacerun: yes;">&nbsp; </span>I attribute this to the Internet and doing a live broadcast every night of the week.<span style="mso-spacerun: yes;">&nbsp; </span>The other thing is, I’m an archivist and firmly believe that the music being played nightly at Smalls will be of historic importance to future generations.<span style="mso-spacerun: yes;">&nbsp; </span>Therefore my mission has been to record every single show and have it organized by a date, who the leader was and who was on the date.<span style="mso-spacerun: yes;">&nbsp; </span>First thing I did was to install a recording device and began recording.<span style="mso-spacerun: yes;">&nbsp; </span>This has evolved over the last seven years but we are currently up to about 8000 recordings in our library, which now includes our HD video.<o:p></o:p></span></div><br /><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;"><span style="background: white; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">SG Recently you had a crowd funding campaign. What were your goals, did you succeed and what challenges did you face?<span style="mso-spacerun: yes;">&nbsp; </span></span></b><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p></o:p></span></b></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Our goal with the crowd funding campaign was to raise money for new equipment for our live streaming (ie computers and cameras) as well as to buy a new piano.<span style="mso-spacerun: yes;">&nbsp; </span>We were successful in this and hit our goal.<span style="mso-spacerun: yes;">&nbsp; </span>We did buy a new Steinway for the club and well as installed an entirely new and up to date streaming system and in-house recording studio.</span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">As far as the crowd funding experience – my thoughts are that it is a terrible way to fund a business.<span style="mso-spacerun: yes;">&nbsp; </span>For one thing, you tap the good will of everyone that likes or supports you.<span style="mso-spacerun: yes;">&nbsp; </span>Secondly, you can’t do it again – it’s a one-time shot.<span style="mso-spacerun: yes;">&nbsp; </span>The other thing that nobody talks about is that if you do get your money there this huge tax liability at the end of the year in the form of a 1099.<span style="mso-spacerun: yes;">&nbsp; </span>If you don’t properly prepare for that and spend all the money then you’re going to get hit.<span style="mso-spacerun: yes;">&nbsp; </span>Furthermore, Indiegogo took a big chunk in “fees”.<span style="mso-spacerun: yes;">&nbsp; </span>I don’t like crowdfunding and hope it’s just a passing fad.<o:p></o:p></span></div><br /><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">SG I understand that you would like to use the Internet to monetize your archive of recordings of the shows performed at the club in the last 7 years and share revenues with the artists. <o:p></o:p></span></b></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">My idea is to build a website platform where we can disseminate our huge library of recordings and videos. This has proved more complex and expensive than I had planned.<span style="mso-spacerun: yes;">&nbsp; </span>The plan is to do a full revenue share with all of the artists that are in our archive.<span style="mso-spacerun: yes;">&nbsp; </span>We want to charge a small subscription rate for fans to access our ever-growing library.<span style="mso-spacerun: yes;">&nbsp; </span>The revenue from the subscriptions is pooled and distributed to artists based on how much their work gets listened to.<span style="mso-spacerun: yes;">&nbsp; </span>The more popular an artist is, the more they make – law of the jungle economics.<span style="mso-spacerun: yes;">&nbsp; </span>This is a big system and what I realized I had to do and have since done is taken on partners to make SmallsLIVE LLC real.<span style="mso-spacerun: yes;">&nbsp; </span>I’ve since partnered with two guys, one is a man who is a programmer and has his own successful website development company.<span style="mso-spacerun: yes;">&nbsp; </span>The other partner is an investor to finance the building of this site.<span style="mso-spacerun: yes;">&nbsp; </span>Once the site is up and launched we will be able to use it to accommodate an entire range of related media projects including our live stream and video library as well as educational videos, downloads and merchandise.<o:p></o:p></span></div><br /><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">SG <span style="mso-spacerun: yes;">&nbsp;</span>You now have over 4000 subscribers on your YouTube channel, and over 34,000 Facebook fans. What other social networks do you use? How much work does it take to maintain engagement with your fans through them, and is it worth it?&nbsp;<o:p></o:p></span></b></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">We were, at first, excited about YouTube.<span style="mso-spacerun: yes;">&nbsp; </span>It seemed amazing that you could have a CDN [Content Delivery Network] host your live stream for free.<span style="mso-spacerun: yes;">&nbsp; </span>Well, it’s not really free in the sense that you don’t have real control over the content that you stream.<span style="mso-spacerun: yes;">&nbsp; </span>YouTube screens your video and scans for illicit use of copyrighted material.<span style="mso-spacerun: yes;">&nbsp; </span>In our case, when we play our iPod on breaks, we get flagged even though we are paying for the right to publicly perform that music to the appropriate music collection societies.<span style="mso-spacerun: yes;">&nbsp; </span>But if you get flagged, YouTube will not allow you to stream any music including our live performances.<span style="mso-spacerun: yes;">&nbsp; </span>It’s was a headache.<span style="mso-spacerun: yes;">&nbsp; </span>On the other hand, it’s very affordable to rent time on a good CDN such as Bit Gravity.<span style="mso-spacerun: yes;">&nbsp; </span>Then you have full control of your stream and the content that you’re creating.<o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">We have a large fan base on Facebook and also Twitter.<span style="mso-spacerun: yes;">&nbsp; </span>We also have a rapidly growing email list and regularly do a newsletter and post to our social media.<span style="mso-spacerun: yes;">&nbsp; </span>Facebook is great because it’s very affordable to use and reaches a lot of people who you know are already interested in what you’re doing.</span></div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p></o:p></span>&nbsp;</div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;"><span style="background: white; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">SG We already discussed what you plan to do next and the challenges you are facing. This interview at the beginning of 2014, where can readers go to check your progress?</span></b><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p></o:p></span></b></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Our goal for 2014 is to get our new website built with the revenue sharing system.<span style="mso-spacerun: yes;">&nbsp; </span>The new company is now formed and work will begin soon.<span style="mso-spacerun: yes;">&nbsp; </span>I hope to have it launched by the fall.<span style="mso-spacerun: yes;">&nbsp; </span>Smalls Jazz Club is wonderful and more and more popular.<span style="mso-spacerun: yes;">&nbsp; </span>The music is always great.<span style="mso-spacerun: yes;">&nbsp; </span>As far as myself, I am also focusing more on my trio and concertizing much more.<span style="mso-spacerun: yes;">&nbsp; </span>I had a great 2-week European tour last year with the trio and plan to do more of that.<o:p></o:p></span></div>Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com0tag:blogger.com,1999:blog-3486088391463104302.post-35723929372346019012014-03-03T13:11:00.000-08:002014-03-03T13:11:58.656-08:00HOW TO MARKET A RECORD IN THE DIGITAL AGE: “TWENTY” BY BOYZ II MEN<h1></h1><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">Mark Offenbach is a former Senior Vice President of Sony Music, and currently serves as is an Associate Professor of Music Marketing at Drexel University. &nbsp;He recently worked on the production and distribution of the 10<sup>th</sup>studio album of the great American R&amp;B group, Boyz II Men. The album is called <i>Twenty</i> in recognition of Boyz II Men’s twenty years in the music business and includes 13 original songs and 8 re-recorded Boyz II Men classics. Boys II Men are no longer on a label and this was a complete indie project. In this interview we discuss how the record was produced and distributed without the help of a major label, the strategies that Mark and his partners implemented and the challenges that they faced.&nbsp; <o:p></o:p></span></h3><h1><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp; How did you break into the music business? <span style="font-weight: normal;"><o:p></o:p></span></span></h1><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">I graduated from Brooklyn College with a degree in music.&nbsp; Although I studied classical music I love all kinds of music including, jazz, pop, R&amp;B, hip-hop, everything. After graduating I tried to get a job in the music business, but the best I could do was a job working at the great, but now defunct, music retail chain, Sam Goody. That is kind of where I started cutting my teeth working music retail. Then I got a job at a small classical label. Although I love classical music, I wanted to really get into the pop/rock world. So I went to work with an independent distributor of alternative rock music. After that I landed a job at Universal Records, but soon secured an executive position at Sony Music where I spent the majority of my career as a senior marketing executive. <o:p></o:p></span></h3><h1><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp; Boyz II Men are no longer signed to a label, so who came up with the idea of making <i>Twenty</i> and how did they convince the other members of the team to go ahead with this project?<span style="font-weight: normal;"><o:p></o:p></span></span></h1><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">Well, first of all, the music business is about art. But it’s also about commerce. The reason why you do things, and the reason why I’m in the music business, and I would imagine the reason why most people are in the music business, is because they love music. But, as I said, there is commerce involved, because everybody’s got to live and eat and pay rent and all that. With <i>Twenty</i>, I had left Sony Music and I was getting consulting jobs here and there, which were great. Through my connections of managers and artists, I heard that Boyz II Men were unhappy with their major label connection and wanted to possibly do something new. <o:p></o:p></span></h3><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">So, just from a friend of a friend of a friend, I got to speak to their manager and then eventually spoke to the band with some other people I had business with before. Then we said, “Hey, why do not we try to do this on our own? Let us do a joint venture, 50/50 profit split with the artist.” Because of the way the business is today, and because of the way you can reach people online, you don’t need a huge staff. The way I look at it today, and the way a lot of artists are looking at it today, if you have a small team (3-4 people) who really have a lot of experience in the business and really understand the business and know the business; all aspects of marketing, sales, promotion, A&amp;R, packaging, digital marketing. You do not need that many people if you have the right little core. You can really make something happen. So, we felt Boyz II Men, their management and myself and my partners (only 2 other people), could be successful. <o:p></o:p></span></h3><h1><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp; Twenty includes 21 new tracks – that’s really two albums. Was it expensive to produce? <span style="font-weight: normal;"><o:p></o:p></span></span></h1><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">The recording budget was…I think we ended up between $290, close to $300,000. <o:p></o:p></span></h3><h2 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt;">SG</span><span style="color: windowtext; font-size: 10pt;">&nbsp;&nbsp; </span><span style="color: windowtext; font-size: 10pt;">So, in terms of major artist releases these days, is $300,000 a lot of money, a little money, or in-between?</span></h2><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="font-weight: normal;"><span style="color: windowtext; font-size: 10.0pt;">No, that is a lot of money. The reason why it ended up being a lot of money is because Boyz II Men don’t write all of their material. They write some of their material and in the R&amp;B hip hop world, that’s kind of the case out there. A lot of people have to go out and get other people to write and help produce the albums. And we used some of the best in the business including Babyface, Dallas Austin, and Jimmy Jam and Terry Lewis and Teddy Riley. So a lot of the costs involved were getting all these great, great, writer/producers out there who definitely deserve to get paid. They write great music and that’s how they make a living. I think all the producers/writers involved on the Boyz II Men record delivered great, great songs.</span><o:p></o:p></span></h3><h1><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp; What were these legendary artists and producers like to work with?<span style="font-weight: normal;"><o:p></o:p></span></span></h1><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="font-weight: normal;"><span style="color: windowtext; font-size: 10.0pt;">Unfortunately the only aspect I worked on was getting contracts done with the band and with the writer/producers. It was really due to the fact that it was a joint venture. Boyz II Men wanted to make the record themselves. This is the first time they really themselves put a record together. But my partners and I did have a creative vision. We brought in Charlie Wilson, which was the first single off the record. That was kind of our input, because Charlie is a great R&amp;B singer and big in the urban-adult radio arena and we thought if we put Charlie Wilson and Boyz II Men together to do urban-AC record it could become a pretty big hit, which it was. </span><span class="apple-converted-space"><span style="background: white; font-size: 10.0pt; mso-bidi-font-family: Arial;">&nbsp;</span></span><span style="background: white; font-size: 10.0pt; mso-bidi-font-family: Arial;">The first single was "More Than You'll Ever Know" featuring<span class="apple-converted-space">&nbsp;</span></span><span style="color: windowtext; font-size: 10.0pt;"><a href="http://en.wikipedia.org/wiki/Charlie_Wilson_(singer)" title="Charlie Wilson (singer)"><span style="background: white; color: windowtext; mso-bidi-font-family: Arial;">Charlie Wilson</span></a></span><span style="background: white; color: windowtext; font-size: 10.0pt; mso-bidi-font-family: Arial;">. </span><span style="color: windowtext; font-size: 10.0pt;">It debuted was one of the biggest R&amp;B, urban-AC débuts of the year. It did very, very, very well. And one of my partners was involved in the creative process but mostly it was the band working with the producers. We can in terms of marketing the record. <o:p></o:p></span></span></h3><h1><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp; I understand that the key to your distribution strategy was setting up an exclusive deal for distribution of the CD through Wal-Mart.<span style="font-weight: normal;"><o:p></o:p></span></span></h1><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">Right, Wal-Mart was a great way of getting the record out there. I knew that Wal-Mart sold a lot of Boyz II Men records, physical product. So, with Wal-Mart having over 3,000 stores and 150 million people a week walking into those stores, it is a nice partner to be involved with. Plus, I had done other exclusive deals with Wal-Mart through my career, so I kind of looked at that as, “Hey maybe that might possibly be an avenue.” When it was introduced to them, they were 100% into it. They really, really wanted to do it, so that is kind of why we went that route. <o:p></o:p></span></h3><h1><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp;&nbsp; What were the benefits of the Wal-Mart deal? <span style="font-weight: normal;"><o:p></o:p></span></span></h1><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">Tremendous amount of marketing back from Wal-Mart. Having stacks of Boyz II Men records all around and having signage all over the Wal-Mart stores. And doing a special Wal-Mart Soundcheck, which is an in-store video promotion where we record the band live. Yes, so tremendous amount of giveback from Wal-Mart.<o:p></o:p></span></h3><h1><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp; Were you happy the way the exclusive CD deal with Wal-Mart turned out? <span style="font-weight: normal;"><o:p></o:p></span></span></h1><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">We had a certain sales goal to hit for the record, which we hit, which was great. The fact of the matter is, when <i>Twenty</i> came out it debuted (funnily enough) at #20 on the Billboard album chart, which for an independent small little rinky-dink bunch of guys running around, to have an album debut at #20 is pretty…very, very fulfilling and it was like, “Wow. We did it.” <o:p></o:p></span></h3><h2><span style="color: windowtext; font-size: 10pt;">&nbsp;</span><span style="color: windowtext; font-size: 10pt;">SG</span><span style="color: windowtext; font-size: 10pt;">&nbsp;&nbsp; </span><span style="color: windowtext; font-size: 10pt;">Did Wal-Mart make available older Boyz II Men albums with </span><i style="color: windowtext; font-size: 10pt;">Twenty</i><span style="color: windowtext; font-size: 10pt;">? If so, did catalogue sales get a boost?</span></h2><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">They did and there was a definitely a tremendous boost in sales from catalogue, but my concept of the new Boyz II Men record was that they re-record 8 of their biggest, their greatest hits for the new record. So, my whole plan was, “Ok, if I am a Boyz II Men fan, here is the brand new record plus, oh my god, here is ‘Mama,’ and ‘End of the Road<i>,</i>’<i></i>and ‘I will Make Love to You,’” which are their classic, classic, huge hits. So, I kind of used that as a big value statement for people to buy the new record.<o:p></o:p></span></h3><h1><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp; I understand that even though you had an exclusive CD deal with Wal-Marts you kept the digital rights. How did you get Wal-Mart to agree to this? Didn’t they fear that downloads would cannibalize the physical sales?<span style="font-weight: normal;"><o:p></o:p></span></span></h1><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">No they did not. If you look at past history of Boyz II Men, it’s 75% physical, 25% digital. Plus, the real reason was…I was very, very honest with the Wal-Mart people. It is the fact of the matter that nobody is going to Wal-Mart.com to download digital music. If they had a platform that enabled, that was viable, out there to consumers I would have suggested that. But I kind of laid it out on the table, and they agreed and they were great about it. I said, “Look, obviously the business is going towards digital. Obviously digital is growing, physical is shrinking. So, it would be unfair to the artist.” I mean I am representing the band. I said, “It would be unfair in my representation of my artist and my partners on this project not to give them a fair shake out there in the world of selling digital music. You cannot offer that, so you really have to be understanding about this and allow us to go elsewhere on the digital.” They were very understanding. It was also helpful that at that time they were just about closing down their digital store. <o:p></o:p></span></h3><h2 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp; Did they at least insist on a holdback before you went digital? Allow them to sell CDs for at least a period of time before the digital release?<span style="font-weight: normal;"><o:p></o:p></span></span></h2><h2 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">No, they did not. <o:p></o:p></span></h2><h2 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp; You must have been very persuasive. So, how did you do with digital sales? Did you sell a lot of units compared to the CD?<span style="font-weight: normal;"><o:p></o:p></span></span></h2><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">Yeah, we are at about a little less than 40% digital compared to CD. <o:p></o:p></span></h3><h2 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp; Where are most of these sales occurring, on iTunes? <span style="font-weight: normal;"><o:p></o:p></span></span></h2><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">Yeah, iTunes. But Amazon’s been great. E-Music has been really, really good. But obviously iTunes was the bulk of it.<o:p></o:p></span></h3><h2 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp; And did you a direct deal with the digital stores or use an aggregator? <span style="font-weight: normal;"><o:p></o:p></span></span></h2><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="font-weight: normal;"><span style="color: windowtext; font-size: 10.0pt;">Our digital distributor in the U.S. for the record was The Orchard. They put on all the digital stores here. I worked with them on the digital side and on the physical side. Outside EX-US, I did a distribution deal for both CD and digital with Universal. So, EX-US it’s all run by Universal out of London.</span> <o:p></o:p></span></h3><h2 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt;">&nbsp;</span><span style="color: windowtext; font-size: 10pt;">SG</span><span style="color: windowtext; font-size: 10pt;">&nbsp;&nbsp; </span><span style="color: windowtext; font-size: 10pt;">How are you doing foreign-wise?</span></h2><h2 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">Fine. That was a great piece, and a really big part of the whole deal, was again I have relationships internationally. So when doing the pitch to Boyz II Men I had already spoken to Universal for ex-US and they were very, very excited because they had all the past Boyz II Men albums. So, part of the pitch to Boyz II Men was, “Hey, by the way, we have the US, but we can also get a great partner with Universal ex-US.” Japan was carved out of that, because Boyz II Men have a separate direct deal with Japan. But they were very happy with the results.<o:p></o:p></span></h2><h2 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp; Ok. Now, are you selling singles digitally, or just the album?<span style="font-weight: normal;"><o:p></o:p></span></span></h2><h2 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="font-weight: normal;"><span style="color: windowtext; font-size: 10pt;">No,</span><span style="color: windowtext; font-size: 10.0pt;"> </span><span style="color: windowtext; font-size: 10pt;">absolutely singles digitally. That is how it’s done…it is almost like the olden days when you had to sell a bunch of singles and you did not sell many albums a lot of times. <o:p></o:p></span></span></h2><h1><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp; Are you selling more singles than albums?<span style="font-weight: normal;"><o:p></o:p></span></span></h1><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">Quantitatively, we have sold more digital singles than albums, yes. <o:p></o:p></span></h3><h1><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp; The <i>Twenty</i> album is available on Spotify. A lot of critics complain they don’t pay enough money to labels are artists. What was your experience?<span style="font-weight: normal;"><o:p></o:p></span></span></h1><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">We haven’t received much money from Spotify. But I believe it’s just starting to grow in this country. It is at its very early stage. I was in a very interesting Spotify presentation last week as a matter of fact. Subscription music services I think are going to be a big part of the business. Whether or not those subscription music services are paying enough now? That could be up for question and discussion. But, it’s definitely, I think, going to be a huge part of the music business in the future. <o:p></o:p></span></h3><h2 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp; We can agree that you did not make a lot of money from Spotify, so the next question is, is Spotify helping promote the album or is it just like another pirate site where people can get it for free and don’t have to pay?<span style="font-weight: normal;"><o:p></o:p></span></span></h2><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">It is a combination of the two. Look, obviously if I’m a 20…a 15-, 16-, 17-, 18-year-old kid, and I have the ability to go to Spotify and listen to something for free; I might not buy it. But, if you are an artist like Boyz II Men who have a very vast catalogue, a lot of titles out there, or any artist that has a pretty decent catalogue, that is the big question that is up for discussion. Is, “Ok, if you have a dozen albums up there and the Spotify users can sample all the albums, are they eventually going to move to purchase?” I mean, Spotify obviously tells you that, yes, they do. But, I have not seen that proven yet. I would like to believe that somebody would do that, but back in the day when you and I were buying records, you wanted to own it. Now you don’t have to. You can listen to it anytime you want. But hopefully as they get more subscribers and/or advertising money the pay-outs will increase. &nbsp;<o:p></o:p></span></h3><h2 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp; You said that Wal-Mart’s really helped with marketing, especially in-store. But, did you have to promote the project independently and was it expensive?<span style="font-weight: normal;"><o:p></o:p></span></span></h2><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">Definitely you always have to promote independently. If you have units available in-store or if you have it up digitally on whatever digital service provider there is, you still have to do marketing. You still have to let people know that the record’s out and that the music is out. So, yeah, we did a ton of TV shows. The Today Show, Rosie O’Donnell Show, Entertainment Tonight, and more. You do all those shows and that costs money. You have to get the guys around and move them around and fly them around. So, it definitely is not cheap. <o:p></o:p></span></h3><h2 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp; Those shows never pay travel costs and only pay a few dollars as “scale” required by the unions, correct? <span style="font-weight: normal;"><o:p></o:p></span></span></h2><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">That’s right, you do not make any money from being on TV shows. The point is …you eventually make money from being on a TV show because of exposure. <o:p></o:p></span></h3><h2 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp; Right. And you were able to get that kind of exposure because Boyz II Men was the most famous and bestselling R&amp;B act of all time. <span style="font-weight: normal;"><o:p></o:p></span></span></h2><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">Yes. But it still was not easy. In fact, we had a great publicity partner and I have a lot of connections in that world as well, so if you have the right team, it’s doable.&nbsp; The fact that Boyz used to be the most successful R&amp;B act does not make getting great exposure a slam dunk. <o:p></o:p></span></h3><h2 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp; Let us go to the magical place they call the bottom line. At the end of the day, did this project make a lot of money for you, your partners and the band? Some money? Or did you lose money?<span style="font-weight: normal;"><o:p></o:p></span></span></h2><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">Definitely no one lost money. On the other hand no one made millions of dollars either. I was not like, “Oh my god, look how much money we are making!” That did not happen, but it was all very satisfying for all parties financially as well as artistically. And we would love to try and do it again. <o:p></o:p></span></h3><h1><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp; What did you learn from this project about making and selling records in today’s very challenging record business?<span style="font-weight: normal;"><o:p></o:p></span></span></h1><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">What I learned was that although Boyz II Men is an iconic artist it’s still not easy to sell records in today’s music business. It is not easy selling records today. It is very difficult. The market is bombarded with hundreds if not thousands of new records every day. So, it was a lot of work to get attention. It was a lot of fun but a lot of work too. &nbsp;What I learned is you just have to really dot all your I’s and cross all your T’s. If you are launching new music out there, you have to really be very intelligent about it and smart about it and really be ready to spend a lot of energy. But it’s very fulfilling at the end of the day.&nbsp; <o:p></o:p></span></h3><h1><span style="color: windowtext; font-size: 10pt;">SG&nbsp;&nbsp; Any last words of advice?<span style="font-weight: normal;"><o:p></o:p></span></span></h1><h3 style="margin-left: 0in; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;"><span style="color: windowtext; font-size: 10pt; font-weight: normal;">I guess the parting shot is one of my mentors, Henry Droz, who ran WEA back in the day when the business was incredibly profitable and selling tons of tons of units and everybody paid for music. Henry said to me, “Marc, the most important thing is that you are having fun.” And he said, “Because if you cannot have fun in the record business, in the music business, something is wrong.” And that is my parting shot. It’s still possible having financial success selling records, but it isn’t worth doing unless you are having fun.<o:p></o:p></span></h3><h2><span style="color: windowtext; font-size: 10pt; font-weight: normal;">&nbsp;</span></h2><br /><h1><span style="color: windowtext; font-size: 10.0pt;">End of Interview<o:p></o:p></span></h1>Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com0tag:blogger.com,1999:blog-3486088391463104302.post-29143485369618933362014-02-24T10:30:00.003-08:002014-02-24T10:30:43.765-08:00Music Licensing for Fashion Shows <br /> <br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;">The Fashion Institute at Fordham Law School asked me to speak on a panel about licensing music for fashion shows.<span style="mso-spacerun: yes;">&nbsp; </span>The Fashion Institute is the world’s first center dedicated to fashion law.<span style="mso-spacerun: yes;">&nbsp; </span>This article incorporates my presentation.<span style="mso-spacerun: yes;">&nbsp; </span>It provides a legal roadmap for designers and producers of fashion shows who wish to use music for live shows, TV programs and the Internet including uploading footage to YouTube.<o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">Music Licensing Primer<o:p></o:p></span></b></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;">In order to understand music licensing for any project, it is necessary to know that every piece of recorded music contains two copyrights -- one is the underlying musical composition or song, and the other is the recording itself. The copyright in the song is usually controlled by the songwriter or the writer’s representative, a music publisher.<span style="mso-spacerun: yes;">&nbsp; </span>The copyright in the recording is usually controlled by the artist if unsigned or and by a record company if the artist is signed.<span style="mso-spacerun: yes;">&nbsp; </span>Songwriters and music publishers have an exclusive right to publicly perform their songs.<span style="mso-spacerun: yes;">&nbsp; </span>If you sing a song in the shower, you don’t need a license. That’s a private performance.<span style="mso-spacerun: yes;">&nbsp; </span>But permission is required to publicly perform music on any radio or TV station, Internet radio and streaming on demand, and in bars, nightclubs, restaurants, arenas, stadiums, bowling alleys, amusement parks, and any other place or venue where music is publicly performed.<span style="mso-spacerun: yes;">&nbsp; </span><o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;">However, if songwriters tried to license each venue and place that publicly performed their music they would never have time to write music.<span style="mso-spacerun: yes;">&nbsp; </span>Even large music publishers do not have the resources to do this job.<span style="mso-spacerun: yes;">&nbsp; </span>Instead songwriters and publishers use performing rights organizations or “PROs” to license their music and collect the fees payable from the licensees on their behalf. <span style="mso-spacerun: yes;">&nbsp;</span>The vast majority of countries in the world each have one PRO.<span style="mso-spacerun: yes;">&nbsp; </span>For instance, England has PRS, Japan has JASRAC, Germany has GEMA, Australia has APRA and France has SACEM.<span style="mso-spacerun: yes;">&nbsp; </span>In the United States we have three: ASCAP, BMI and SESAC.<span style="mso-spacerun: yes;">&nbsp; </span>They all have the same function: to license and collect monies on behalf of their members, the songwriters and music publishers, from anyone who publicly performs music.<span style="mso-spacerun: yes;">&nbsp; </span>And each provides a “blanket” license that allow the licensee to play any song in their repertoire. Together ASCAP, BMI and SESAC represent almost every commercially successful song in the U.S., and through their reciprocal relationships with foreign PROs, they represent almost all commercially successful songs in the world. <o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;">Owners of “sound recordings” are also protected by copyright law. Only the owner of the copyright in a recording of music has the right to make copies of that record and sell it because the exclusive right to make and distribute copies is one of the rights afforded by the copyright law to copyright owners.<span style="mso-spacerun: yes;">&nbsp; </span>However, in the U.S., unlike owners of copyrights in songs, owners of copyrights in sound recordings do not have exclusive public performance rights.<span style="mso-spacerun: yes;">&nbsp; </span>When the Copyright Act was amended to protect sound recordings in the early 70’s the broadcast community heavily lobbied Congress to carve out this right. They argued that broadcasters, especially radio, promoted record sales and they should not be forced to pay for a service that they were providing for the artists and the labels. They also pointed out that record companies not only encouraged them to play their records, they often paid DJs to play them, a practice known as “payola.” Congress agreed with the broadcasters perhaps because the politicians needed radio’s good particularly during their campaigns for re-election, and they needed the good will the record companies far less.<span style="mso-spacerun: yes;">&nbsp; </span>In any event, because owners of copyrights in sound recordings have no exclusive right of public performance, anyone can publicly play a record without permission. There is one exception -- the Copyright Act was amended in the 90’s to provide an exclusive right to perform sound recording via digital transmission. <span style="mso-spacerun: yes;">&nbsp;</span>I will describe the impact of this exception when we discuss transmitting fashion shows on the Web. <o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;">Licensing Music for Live Fashion Shows</b><o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;">Applying the above rules to fashion shows, the designer or producer of live shows can play CDs or hook up an iPod to speakers without having to worry about clearing the records. <span style="mso-spacerun: yes;">&nbsp;</span>But it is necessary to clear the underlying songs.<span style="mso-spacerun: yes;">&nbsp; </span>So, for instance, you can play Lady Gaga’s recording of “Bad Romance” without permission, but you will need to clear the underlying song by Gaga and Nadir Khyat who are represented by Sony/ATV. <o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;">Some venues where fashion shows take place, including most nightclubs, will already have ASCAP, BMI and SESAC licenses. So the producer of the show doesn’t have to worry about getting a license to play songs. <span style="mso-spacerun: yes;">&nbsp;</span>However, some venues won’t have a license. For instance, the temporary structures set up for Fashion Week in NYC at Lincoln Center. <span style="mso-spacerun: yes;">&nbsp;</span>Also venues such as schools, museums or galleries will usually insist that the designer or producer secure a PRO license.<span style="mso-spacerun: yes;">&nbsp; </span>Each PRO has different licenses that apply to the many different places that publicly perform music, and each has a license that would apply to fashion shows. Here are the rates that apply to fashion shows: <o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;">SESAC:<span style="mso-spacerun: yes;">&nbsp; </span>The rate is $74 per day for a show that runs 1-10 days, and $67 per day for shows that run from 11-30 days.<span style="mso-spacerun: yes;">&nbsp; </span>The rate continues to decrease the more days the show runs.<span style="mso-spacerun: yes;">&nbsp; </span>(Note that although SESAC is the smallest of the three U.S. PROs, its repertoire has grown a great deal in recent years in every genre of music.<span style="mso-spacerun: yes;">&nbsp; </span><o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;">BMI:<span style="mso-spacerun: yes;">&nbsp; </span>The rate is based on seating capacity -- for shows that don’t charge admission the fees are $16 for venues with 250 seats or less, $19 for 251 to 750 seats, and the fees rise gradually as seating capacity rises.<span style="mso-spacerun: yes;">&nbsp; </span>However, to use this license you have to pay a minimum of $222 which covers an entire year.<span style="mso-spacerun: yes;">&nbsp; </span>For shows that charge admission, the fees are based on % of gross ticket sales starting with 8/10ths of 1% (.8%) for venues with 250 seats or less, and 6/10 (.6%) for venues with 2501-3500 seats. Thereafter, the fee decreases for larger venues. <o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;">ASCAP:<span style="mso-spacerun: yes;">&nbsp; </span>If the fashion show is designed to raise money for charity then, like BMI, the fee is aligned with seating capacity:<span style="mso-spacerun: yes;">&nbsp; </span>$10 for venues with 5,500 seats or less; $48 for venues with 5,501 seats to 10,000 seats; $99 for venues with more than 10,000 up to 20,000 seats, and the rates continue to increase as the seating capacity increases. <span style="mso-spacerun: yes;">&nbsp;</span>Similar to BMI, ASCAP charges a minimum fee ($126) which covers a full year.<span style="mso-spacerun: yes;">&nbsp; </span>If the live fashion show is not designed for charity and pre-recorded music is used, then the fee is $97 per day.<span style="mso-spacerun: yes;">&nbsp; </span>If a live band plays and there is no admission charge, then the fee is 1% of “Live Entertainment Costs.” Such costs include paying the band, instrument rental and booking agent fees. <span style="mso-spacerun: yes;">&nbsp;</span>If the show charges admission, the fee is 1.75% of Live Entertainment Costs.<o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">Fashion Week License<o:p></o:p></span></b></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;">ASCAP has a special license for IMG, the major talent/modeling<span style="mso-spacerun: yes;">&nbsp; </span>agency which produces a lot of shows during Fashion Week in New York, but the rates are confidential.<o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">How to Avoid PRO Licenses<o:p></o:p></span></b></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;">If the venue is not licensed, and the designer or producer wants to play music at a live show, they can still avoid having to secure the PRO licenses and paying the accompanying fees by hiring a live band that writes its own music. <span style="mso-spacerun: yes;">&nbsp;</span>Even if the members of the band who wrote the music are signed to one of the PROs, they retain the right to permit any third to publicly perform their music. <o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">Licensing Music for Fashion Shows that Play on TV<o:p></o:p></span></b></div><br /><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-outline-level: 4; text-align: justify;"><span style="font-family: Calibri;">Last fall the “<span style="mso-font-kerning: 18.0pt;">Victoria's Secret Fashion Show” raked in record ratings at CBS. The </span>2011 broadcast of the annual underwear parade saw its highest ever showing in adults 18-49 and the largest audience since 2002. Aside from the models and sexy lingerie</span><span class="st1"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;;">, </span></span><span style="font-family: Calibri;">the show featured an abundance of music including songs by Kanye West , Jay-Z, Rihanna, Maroon 5, Nicky Manaj, Lady Gaga and </span><a href="http://www.beyonceonline.com/"><span style="color: windowtext; text-decoration: none; text-underline: none;"><span style="font-family: Calibri;">Beyoncé</span></span></a><span style="font-family: Calibri;">.<span style="mso-spacerun: yes;">&nbsp; </span>Victoria Secret’s lawyer did not have to worry about PRO licenses for the public performance of the songs, however. <span style="mso-spacerun: yes;">&nbsp;</span>CBS, like all other networks and indeed cable TV services, already have licenses from ASCAP, BMI and SESAC in place. <span style="mso-spacerun: yes;">&nbsp;</span>Moreover, the lawyer didn’t have to be concerned that pre-recorded music was performed on the show. As discussed, owners of sound recordings do not have the exclusive right to publicly perform their recordings at live shows or on standard radio and television broadcasts. <span style="mso-spacerun: yes;">&nbsp;&nbsp;</span><o:p></o:p></span></div><br /><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-outline-level: 4; text-align: justify;"><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNoSpacing" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">However, since the TV program was pre-recorded (as opposed to broadcast live), the music had to be “fixed in time relation” to the visual images contained in the program. In regard to songs, a synchronization or “synch” license for each musical composition was required.<span style="mso-spacerun: yes;">&nbsp; </span>In<span style="mso-spacerun: yes;">&nbsp; </span>addition, since some of the original master recordings were used in the<span style="mso-spacerun: yes;">&nbsp; </span>is show, a “master use” license was required from the record company which owned those sound recordings.<span style="mso-spacerun: yes;">&nbsp; </span><o:p></o:p></span></div><br /><div class="MsoNoSpacing" style="margin: 0in 0in 0pt;"><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNoSpacing" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">Synch Licenses for TV<o:p></o:p></span></div><br /><div class="MsoNoSpacing" style="margin: 0in 0in 0pt;"><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNoSpacing" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">Unlike PRO licenses, there is no pre-set rate for synch licenses. <span style="mso-spacerun: yes;">&nbsp;</span>Every synch license is subject to negotiation. The fees for synch licenses can vary wildly from very cheap for a music documentary to extremely expensive for national TV commercials.<span style="mso-spacerun: yes;">&nbsp; </span>Synch licenses for network television fall somewhere in between.<span style="mso-spacerun: yes;">&nbsp; </span>In order to secure a license, the producer must negotiate with the songwriters’ representative, usually a music publisher such as Warner/Chappell, Sony ATV, or EMI music, although there are thousands of publishers and sometimes the songwriter is self-published. <span style="mso-spacerun: yes;">&nbsp;</span>The fee for use of music in a TV program will vary depending on a number of factors including:<o:p></o:p></span></div><br /><div class="MsoNoSpacing" style="margin: 0in 0in 0pt;"><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoNoSpacing" style="margin: 0in 0in 0pt 0.75in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><!--[if !supportLists]--><span style="mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">-</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><!--[endif]--><span style="font-family: Calibri;">The identity of the broadcaster. For instance, network is more expensive than cable and the fee may be cheaper if the TV station has a limited audience such as a local station or one only available to an audience with special devices such as satellite TV. Note that a producer does not have to acquire a synch license if the show is performed on public broadcasting stations because PBS has a blanket license to use musical compositions in its programs. <o:p></o:p></span></div><br /><div class="MsoNoSpacing" style="margin: 0in 0in 0pt 0.75in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><!--[if !supportLists]--><span style="mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">-</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><!--[endif]--><span style="font-family: Calibri;">The nature of use.<span style="mso-spacerun: yes;">&nbsp; </span>For instance, you may pay more to use a song over the credits as opposed in the body of the program. You also may have to pay more for a “visual vocal” use, that is when a performer is depicted performing the song, rather than a background use.<o:p></o:p></span></div><br /><div class="MsoNoSpacing" style="margin: 0in 0in 0pt 0.75in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><!--[if !supportLists]--><span style="mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">-</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><!--[endif]--><span style="font-family: Calibri;">Duration:<span style="mso-spacerun: yes;">&nbsp; </span>You may be able to get a discount if you use only brief excerpts of a song.<o:p></o:p></span></div><br /><div class="MsoNoSpacing" style="margin: 0in 0in 0pt 0.75in; mso-list: l0 level1 lfo1; text-indent: -0.25in;"><!--[if !supportLists]--><span style="mso-ascii-font-family: Calibri; mso-bidi-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">-</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><!--[endif]--><span style="font-family: Calibri;">Term: <span style="mso-spacerun: yes;">&nbsp;</span>A producer may want a long term such as 3-5 years because the TV service may want to repeat the program.<span style="mso-spacerun: yes;">&nbsp; </span>But a 5 year license will cost more than 1 year.<o:p></o:p></span></div><br /><div class="MsoListParagraphCxSpFirst" style="margin: 0in 0in 0pt 1.25in; mso-add-space: auto;"><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt; mso-add-space: auto;"><span style="font-family: Calibri;">Another important factor is the song itself. <span style="mso-spacerun: yes;">&nbsp;&nbsp;</span>A song written by Mick Jagger and Keith Richards, or Lennon and <em><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-theme-font: minor-bidi; mso-hansi-theme-font: minor-latin;">McCartney</span></em><i style="mso-bidi-font-style: normal;"> </i>may be much more difficult to secure than a song written by an obscure songwriter or a new songwriter.<span style="mso-spacerun: yes;">&nbsp; </span>Their representatives, the music publishers, may deny permission because they do not want the songs associated with a particular brand such as Victoria’s Secret.<span style="mso-spacerun: yes;">&nbsp; </span>If the show has already been recorded, and the publishers refuse to license a song, the producer must <span style="mso-spacerun: yes;">&nbsp;</span>bear the expense of replacing the song with other music or face the disaster of cutting the footage containing the song if an artist is depicted performing the song. The best way to avoid these problems is to try to clear the music BEFORE production. <span style="mso-spacerun: yes;">&nbsp;</span>If there is denial, the producer can choose a different song without any economic loss.<span style="mso-spacerun: yes;">&nbsp; </span>Generally the rates applying to network synch licenses can range from $1500 to $3000. <o:p></o:p></span></div><br /><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt; mso-add-space: auto;"><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt; mso-add-space: auto;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">Master Use Licenses for TV<o:p></o:p></span></b></div><br /><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt; mso-add-space: auto;"><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt; mso-add-space: auto;"><span style="font-family: Calibri;">If the producer used the original recordings of songs such as the Rihanna’s recording of “Umbrella” he has to go the record company to use the recording. <span style="mso-spacerun: yes;">&nbsp;</span>In this case, Def Jam. <o:p></o:p></span></div><br /><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt; mso-add-space: auto;"><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoListParagraphCxSpLast" style="margin: 0in 0in 10pt; mso-add-space: auto;"><span style="font-family: Calibri;">All the same factors that we talked about for synch licensing apply to negotiating<span style="mso-spacerun: yes;">&nbsp; </span>master use licenses.<span style="mso-spacerun: yes;">&nbsp; </span>But generally a label will go along with the quote provided by the music publisher for the song. However, just like songs, the owner of the copyright in a master may just say “no” EVEN IF the copyright owner of the song gives permission.<span style="mso-spacerun: yes;">&nbsp; </span>For instance Sony Music may not want a recording made by Tony Bennett to be included in a fashion show featuring lingerie even if the publisher had no problem with the use of the underlying song. Again, the best way to avoid this potential disaster is to clear the music before taping the show. <span style="mso-spacerun: yes;">&nbsp;</span><o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">Licensing Music for Fashion Shows for the Web<o:p></o:p></span></b></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;">Public Performance <o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Calibri;">If the producer uploads footage containing music on YouTube or Vevo there is no need to secure licenses from ASCAP, BMI or SESAC. <span style="mso-spacerun: yes;">&nbsp;</span>These sites already have licenses from the PROs.<span style="mso-spacerun: yes;">&nbsp; </span>But if the producer plays the footage on its own site, <span style="mso-spacerun: yes;">&nbsp;&nbsp;</span>public performance licenses will be required. <span style="mso-spacerun: yes;">&nbsp;</span>These are the current minimum fees: <span style="mso-spacerun: yes;">&nbsp;&nbsp;</span><o:p></o:p></span></div><br /><div class="MsoListParagraphCxSpFirst" style="margin: 0in 0in 0pt 0.25in; mso-add-space: auto;"><span style="font-family: Calibri;"><span style="mso-tab-count: 2;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>SESAC: <span style="mso-spacerun: yes;">&nbsp;</span>$225 (semi-annual)<o:p></o:p></span></div><br /><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt 0.25in; mso-add-space: auto;"><span style="font-family: Calibri;"><span style="mso-tab-count: 2;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>BMI: <span style="mso-spacerun: yes;">&nbsp;</span>$335 (annual)<o:p></o:p></span></div><br /><div class="MsoListParagraphCxSpLast" style="margin: 0in 0in 10pt 0.25in; mso-add-space: auto;"><span style="font-family: Calibri;"><span style="mso-tab-count: 2;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>ASCAP: <span style="mso-spacerun: yes;">&nbsp;</span>$344<o:p></o:p></span></div><br /><div class="MsoNoSpacing" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;">Also if the website has advertising, sponsorship, or subscription revenues, the PROs require a share of <span style="mso-spacerun: yes;">&nbsp;&nbsp;</span>that money. <span style="mso-spacerun: yes;">&nbsp;</span>SESAC’s Internet license agreement requires payment of .0057 (.57%) multiplied by revenues generated by the site.<span style="mso-spacerun: yes;">&nbsp;&nbsp; </span>BMI requires payment of 1.75% of gross revenues.<span style="mso-spacerun: yes;">&nbsp; </span>ASCAP’s rate card for interactive streaming is the greater of 3% of the site’s revenues or .0009 multiplied by the number of “service sessions” defined as an individual visit to the website up to one hour.<span style="mso-spacerun: yes;">&nbsp; </span>Any excess to an hour counts as an additional hour. Both BMI and ASCAP also offer alternative fee structures for websites in which music is contained on a limited number of pages. Details on all these licenses can be secured at the websites of each PRO.<span style="mso-spacerun: yes;">&nbsp; </span><o:p></o:p></span></div><br /><div class="MsoListParagraphCxSpFirst" style="margin: 0in 0in 0pt; mso-add-space: auto;"><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt; mso-add-space: auto;"><span style="font-family: Calibri;">As we reported above, owners of the copyright in sound recordings do not have public performance rights for live performances and normal broadcast, but they do for digital transmission.<span style="mso-spacerun: yes;">&nbsp; </span>But if the producer uploads the show to their own website, and the show includes pre-recorded music, they will usually negotiate the public performance of the master as part of the master use license.<span style="mso-spacerun: yes;">&nbsp; </span><o:p></o:p></span></div><br /><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt; mso-add-space: auto;"><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt; mso-add-space: auto;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: Calibri;">Synch and Master Use Licenses for the Web<o:p></o:p></span></b></div><br /><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt; mso-add-space: auto;"><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div><br /><div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 0pt; mso-add-space: auto;"><span style="font-family: Calibri;">Since the songs will be synchronized to a visual image the producer must negotiate a synch license for each song – just like a TV show.<span style="mso-spacerun: yes;">&nbsp; </span>The prices will depend again on many of the same factors we discussed in connection with a TV show including how the song was used, the term of the license, etc. <span style="mso-spacerun: yes;">&nbsp;</span>My recent experience is that one can expect a quote of approximately $1,000 for one year. Again most record companies will go along with the music publisher’s quote.<span style="mso-spacerun: yes;">&nbsp; </span>However, the producer should pre-clear the songs and the masters because the publisher or label can refuse to license the music for any reason. <o:p></o:p></span></div><br /><div class="MsoListParagraphCxSpLast" style="margin: 0in 0in 10pt; mso-add-space: auto;"><o:p><span style="font-family: Calibri;">&nbsp;</span></o:p></div>Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com0tag:blogger.com,1999:blog-3486088391463104302.post-60909290096274790372014-01-13T11:04:00.002-08:002014-01-13T11:15:14.474-08:00WHAT A TALENT MANAGER DOES IN THE DIGITAL AGE<span style="color: black; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-fareast-font-family: &quot;Times New Roman&quot;; mso-themecolor: text1;"></span><br /><span style="color: black; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-fareast-font-family: &quot;Times New Roman&quot;; mso-themecolor: text1;"></span><br /><span style="color: black; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-fareast-font-family: &quot;Times New Roman&quot;; mso-themecolor: text1;"></span><br /><span style="color: black; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-fareast-font-family: &quot;Times New Roman&quot;; mso-themecolor: text1;">Although only turning 30 recently, Emily White is already a force in the entertainment business including music, comedy and sports. She is the "White" in WhiteSmith Entertainment, a talent management company that represents both music artists and comedians. Current music clients include Brendan Benson and Urge Overkill. The firm's comedy division, headed by Keri Smith Esgula, has launched the careers of Kamau Bell ("<i>Totally Busted</i>" on Fox) and Kevin Avery ("<i>Chappelle's Show</i>"), among others. Emily also&nbsp;founded the company's Sports management division following the 2012 Olympics with gold medalist swimmer, Anthony Ervin developing Ervin's presence and brand with tactics rooted in modern music marketing.&nbsp;Emily also co-founded a music a record label with client&nbsp;Brendan Benson in 2012.&nbsp;&nbsp;</span><b style="mso-bidi-font-weight: normal;"><span style="color: black; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-themecolor: text1;"><o:p></o:p></span></b><br /><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p>&nbsp;</o:p></span></b></div><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Please give a thumbnail sketch of your career.<o:p></o:p></span></b><br /><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">I definitely set out to work in the music industry.<span style="mso-spacerun: yes;">&nbsp; </span>I did about 8 internships as an undergrad Music Industry major at Northeastern University.<span style="mso-spacerun: yes;">&nbsp; </span>When I was still in school, I met the Dresden Dolls when they were a local band and became their tour manager, which took me all over the world.<span style="mso-spacerun: yes;">&nbsp; </span>Upon graduating, I began working at their management company, Madison House, for Mike Luba.<span style="mso-spacerun: yes;">&nbsp; </span>At Madison House, I worked with The Dolls, The Fiery Furnaces, Dinosaur Jr., Angelique Kidjo, Taj Mahal and others; really learning the craft of management.<span style="mso-spacerun: yes;">&nbsp; </span>Luba eventually left to work at Michael Cohl's Live Nation Artists.<span style="mso-spacerun: yes;">&nbsp; </span>I went too, accepting a position from Bob Ezrin in the recording division.<span style="mso-spacerun: yes;">&nbsp; </span>Following that, I launched Whitesmith Entertainment in 2008 with Keri Smith Esquia, Readymade Records &amp; Publishing with Brendan Benson in 2012 and recently co-founded Dreamfuel, which is crowdfunding for athletes.<o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p>&nbsp;</o:p></span></b></div><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">What is the role of a manager in a musical artist's career? <o:p></o:p></span></b><br /><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">The manager is the point person for all aspects of an artists' career.<span style="mso-spacerun: yes;">&nbsp; </span>We set the short and long term plan with the artist; we assemble, inherit and tweak the team around them to ensure everyone is constantly working hard towards those short and long term goals.<span style="mso-spacerun: yes;">&nbsp; </span>We are the liaison between the artist and the rest of the world working as partners with the artist and basically act as CEO of their business.<o:p></o:p></span></div><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><strong></strong></span><br /><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><strong></strong></span><br /><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><strong>Tell us about some of your clients and what you do for them?<o:p></o:p></strong></span><br /><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">I have been working with Brendan Benson of The Raconteurs for almost five years. Brendan is an interesting example because he's been on a slew of labels, is in a huge band, has a well-respected solo career and, in addition to being an artist, is a producer, songwriter, multi-instrumentalist, and vocalist.<span style="mso-spacerun: yes;">&nbsp; </span>We do everything for Brendan and because he is so prolific as an artist and a producer, we helped him set up his own label and publishing company, Readymade Records, a few years ago.<span style="mso-spacerun: yes;">&nbsp; </span>This gives Brendan a well deserved platform to record and release music in a sustainable manner forever.<span style="mso-spacerun: yes;">&nbsp; </span>Prior to that, he released 4 albums on 4 labels.<span style="mso-spacerun: yes;">&nbsp; </span>There had been no consistency in his career and hopefully we have changed that for good.<span style="mso-spacerun: yes;">&nbsp; </span>Beyond that, we always make sure Brendan is feeling good about what kind of work he is doing as technically my title is Personal Manager.<span style="mso-spacerun: yes;">&nbsp; </span>Our office handles all promo requests and there pretty much isn't anything he does that we aren't directly spearheading and/or involved in.<o:p></o:p></span></div><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><strong></strong></span><br /><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><strong></strong></span><br /><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><strong>Manager's don't need a license, and there is no school for music management that I know of, so what qualifies a person to a be good manager?<o:p></o:p></strong></span><br /><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">I have a lot of pride in the skills that it takes to be a manager and feel incredibly grateful to have been schooled under Mike Luba and Kevin Morris when they were at Madison House.<span style="mso-spacerun: yes;">&nbsp; </span>They are music-loving people who work in the industry for the right reasons.<span style="mso-spacerun: yes;">&nbsp; </span>Through their ways of doing things, I was taught to build businesses around the artist and always take care of the fans.<span style="mso-spacerun: yes;">&nbsp; </span>That mentality has been the foundation of my career and I've never looked back.<span style="mso-spacerun: yes;">&nbsp; </span>Beyond that, it's important to be honest, a good person, and do the things you say you're going to do, being accountable at all times; otherwise as a manager you're not going to get anywhere.<o:p></o:p></span></div><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p></o:p></span><br /><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p></o:p></span><br /><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p>&nbsp;</o:p></span><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">If<span style="mso-spacerun: yes;">&nbsp; </span>you are emerging band or artist, how do go about finding a good manager?<o:p></o:p></span></b><br /><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Genuine and natural networking.<span style="mso-spacerun: yes;">&nbsp; </span>All but two clients I've ever worked with came through a natural relationship.<span style="mso-spacerun: yes;">&nbsp; </span>Even if you're shy, get out there and start meeting folks.<span style="mso-spacerun: yes;">&nbsp; </span>Reputations often speak for themselves.<span style="mso-spacerun: yes;">&nbsp; </span>We take on artists of all sizes, but in this era, there are so many ways to get some things going on your own that if you build it, management will come.<span style="mso-spacerun: yes;">&nbsp; </span>First and foremost however, the art of course has to be great.<o:p></o:p></span></div><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"></span></b><br /><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"></span></b><br /><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">We all think that the manager's job is to make their client a star, but what makes for a good client? Can you give us examples of how clients can help their manager's make them more successful? <o:p></o:p></span></b><br /><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">A good client is someone who gets back to us within 24 business hours but also respects holidays and weekends so we can have normal human breaks to re-charge.<span style="mso-spacerun: yes;">&nbsp; </span>As mentioned, we consider ourselves partners with the artist.<span style="mso-spacerun: yes;">&nbsp; </span>I don't work for them and they don't work for me.<span style="mso-spacerun: yes;">&nbsp; </span>But the faster artists get back to me on emails and phone calls, the faster we can move their careers forward.<o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"></span></b>&nbsp;</div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Let's talk about creative choices and the manager's role in helping the artist make them. I have a young female spanish singer client who is just graduated college and is now a background for a successful Bachata band but she can also sing in English and when she does she sounds like Beyonce. What would you advise if you were her manager? <o:p></o:p></span></b></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">She should do both.<span style="mso-spacerun: yes;">&nbsp; </span>Diversify her career to get multiple avenues and revenue streams going while staying true to herself.<span style="mso-spacerun: yes;">&nbsp; </span>Hopefully she can write as well!<span style="mso-spacerun: yes;">&nbsp; </span>And if not, writing and recording are skills she should work in developing as it will benefit her in the long-term.<o:p></o:p></span></div><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"></span></b><br /><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"></span></b><br /><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">How has the music industry and specifically the role of the manager changed in the digital age?<o:p></o:p></span></b><br /><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">What new opportunities and challenges have emerged for a music manager in the digital age? <o:p></o:p></span></b></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">The role of manager in the new music industry has expanded for sure.<span style="mso-spacerun: yes;">&nbsp; </span>It is our job to create and shape careers as opposed to find deals that might supplement career goals.<span style="mso-spacerun: yes;">&nbsp; </span>Deals are still a large part of an artists' career, but a traditional label structure is something that cannot be counted on anymore.<span style="mso-spacerun: yes;">&nbsp; </span>And again, with so many great direct to fan marketing tools out there, if the artist is great and the artist is willing to work hard, there's no reason why one can't start building a long-term fan base from day one (assuming the music is fantastic).<span style="mso-spacerun: yes;">&nbsp; </span>I suppose the main challenge is that it's more work than ever since the manager, agent and attorney are generally the most consistent team members an artist will have.<span style="mso-spacerun: yes;">&nbsp; </span>But management has always been a ton of work, so in a way, it's more that the type of work has changed as opposed to the amount I suppose.<span style="mso-spacerun: yes;">&nbsp; </span>Regardless, if people think it's just about being in charge, being cool and hanging out; they will fail.<span style="mso-spacerun: yes;">&nbsp; </span>Confidence is important, but that has to be backed up with knowledge and results.<span style="mso-spacerun: yes;">&nbsp; </span>As far as being cool and hanging out?<span style="mso-spacerun: yes;">&nbsp; </span>That might be like 5-10% of it, but the rest is being a geek about one's inbox and staying on top of calls and e-mails.<span style="mso-spacerun: yes;">&nbsp; </span>I clear my Inbox daily and teach young managers modern office skills as ultimately that's a huge foundation of what we do.<o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p>&nbsp;</o:p></span></div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p></o:p></span><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">There are tens thousand of records released in the US alone. One stat is 75,000 record and only 10,000 sell more than 1000 and only 1000 sell more than 10,000. Given that stat, is the holy grail, the only way to success, is to find a leading record company to provide for marketing, advertising, tour support and radio play as well as production costs?<o:p></o:p></span></b></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Not at all.<span style="mso-spacerun: yes;">&nbsp; </span>The holy grail is to diversify oneself, making sure all possible revenue streams are looked after properly: touring, merch, publishing, sponsorship, synch strategy, direct to fan sales and beyond.<span style="mso-spacerun: yes;">&nbsp; </span>If one wants a hit, which many of us do, a major label is the best route; but there are other ways to have a successful career in which artists don't have to give up quite so many rights.<b style="mso-bidi-font-weight: normal;"><o:p></o:p></b></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p>&nbsp;</o:p></span></b></div><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Would you suggest that an artist have a written contract with a manager? <o:p></o:p></span></b><br /><br /><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Absolutely as it clearly defines the relationship for both parties.<span style="mso-spacerun: yes;">&nbsp; </span>A management agreement is like a pre-nup in a way.<span style="mso-spacerun: yes;">&nbsp; </span>Figure out what should happen if a split were to unfortunately happen and then put it in a drawer and forget about it.<o:p></o:p></span><br /><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p>&nbsp;</o:p></span></div><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Finally would you like to add any additional thoughts about the role of the manager in this digital age?<o:p></o:p></span></b><br /><br /><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Artist managers work on commission, which means we only make money if the artist does.<span style="mso-spacerun: yes;">&nbsp; </span>Don't take that for granted.<span style="mso-spacerun: yes;">&nbsp; </span>Many other team members in an artists' career charge fees up front and are paid no matter what.<span style="mso-spacerun: yes;">&nbsp; </span>That is not the case with your manager who is there for you and your career in every way.<span style="mso-spacerun: yes;">&nbsp; </span>Nurture that relationship and it will only continue to grow in the artist's benefit.<o:p></o:p></span><br /><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p>&nbsp;</o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p></o:p></span>&nbsp;</div>Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com0tag:blogger.com,1999:blog-3486088391463104302.post-62440630958930306072013-08-29T08:12:00.000-07:002013-08-29T08:41:56.074-07:00ROBIN THICKE’S LEGAL BATTLE WITH MARVIN GAYE ESTATE<br /><div align="center" class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: center;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt;">ROBIN THICKE’S LEGAL BATTLE WITH MARVIN GAYE ESTATE:<o:p></o:p></span></b></div><br /><div align="center" class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: center;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt;">Is “Blurred Lines” substantially similar to “Got To Give It Up” and even it is, does Gaye’s estate lack “standing” to sue for copyright infringement?<o:p></o:p></span></div><br /><div style="background: white; margin-bottom: 0pt;"><span style="color: #222222;"><o:p>&nbsp;</o:p></span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt;">Robin Thicke had a huge hit this summer with "Blurred Lines." The video engendered some<o:p></o:p></span></div><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt;">controversy by including&nbsp;topless models dancing around Thicke, Clifford Harris (“T.I.”), and Pharrell<span style="background: white; color: black;">,</span> Williams who co-wrote the song with Thicke. Now the song is engendering another controversy in its own right. <span style="background: white; color: #111111;">Members of Marvin Gaye's family reportedly threatened to sue Thicke and Pharrell on the grounds that “Blurred Lines” sounds like Marvin Gay’s “Got To Give It Up”.</span>It has also been widely reported that&nbsp;Gaye's family rejected a six-figure settlement offer from Thicke's camp. Thicke and Pharrell decided to act preemptively by filing a lawsuit on August 15<sup>th</sup> in U.S. District Court in Los Angeles requesting a declaratory judgment that "Blurred Lines" does not infringe the copyright in "Got To Give It Up", and that Gaye’s estate lacks "standing"&nbsp;to sue for copyright infringement.&nbsp;&nbsp;<o:p></o:p></span><br /><br /><div style="background: white; margin-bottom: 0pt;"><span style="color: #222222;">According to the copyright law there is no copyright infringement unless the new work is "substantially similar" to the original work. Pasted below are links to both songs and you can decide whether "Blurred Lines" is substantially similar to "Got To Give It Up".&nbsp;</span></div><span style="color: #222222; font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"></span><br /><div style="background: white; margin-bottom: 0pt;"><span style="color: #222222; font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">&nbsp;</span></div><span style="color: #222222; font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><o:p><span style="font-family: Times New Roman; font-size: small;"></span></o:p></span><div style="background: white; margin-bottom: 0pt;"><span style="color: #222222; font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><span style="font-family: Times New Roman; font-size: small;">GOT TO GIVE IT UP</span></span><br /><span style="color: #222222; font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><span style="font-family: Times New Roman; font-size: small;">&nbsp;<a href="https://www.youtube.com/watch?feature=player_embedded&amp;v=wRcVQDELAd4#t=26"><span style="color: blue;">https://www.youtube.com/watch?feature=player_embedded&amp;v=wRcVQDELAd4#t=26</span></a><o:p></o:p></span></span></div><span style="color: #222222; font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><span style="font-family: Times New Roman; font-size: small;"><br /><div class="MsoNoSpacing" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt;">BLURRED LINES <o:p></o:p></span></div><a href="https://www.youtube.com/watch?v=yyDUC1LUXSU"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt;"><span style="color: blue;">https://www.youtube.com/watch?v=yyDUC1LUXSU</span></span></a><span style="color: #222222; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt;">&nbsp;<o:p></o:p></span></span><div style="background: white; margin-bottom: 0pt;"><br /></div><div style="background: white; margin-bottom: 0pt;"><br /></div></span><br /><div style="background: white; margin-bottom: 0pt;"><span style="color: #222222;">THE "HOMAGE" ISSUE&nbsp;</span><span style="color: #222222; font-size: 10pt;"><o:p></o:p></span></div><br /><div class="MsoNoSpacing" style="margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Thicke&nbsp;told a reporter that he was not only aware of Gaye's song, but that "Blurred Lines" was <span style="mso-spacerun: yes;">&nbsp;</span>inspired by "Got To Give It Up". In a sense, therefore, he was paying homage to Marvin Gaye and his song.<span style="mso-spacerun: yes;">&nbsp; </span>However, there is no such thing as a "homage" defense to copyright infringement. There is a parody defense, but "Blurred Lines" does not make fun of the Gaye song so that defense does not apply. &nbsp;If&nbsp;Thicke&nbsp;really wanted to pay homage to the Gaye song, he could have just rerecorded the original song with the original lyrics. If he had done that, he would&nbsp;have qualified for a "Compulsory license". Anyone can re-record a copyrighted song that has been </span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt;">previously commercially released (as "Got To Give It Up" was), so long as they pay a statutory royalty now set at 9.1 cents per unit sold. This is known as a "cover." But Thicke&nbsp;and Pharrell did not make a "cover” of&nbsp;"Got to Give It Up". There are noticeable differences&nbsp;in the two songs. Particularly "Blurred Lines" has entirely new</span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"> </span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt;">lyrics.&nbsp;Thus Thicke&nbsp;is not entitled to the benefit of the compulsory license.&nbsp;<o:p></o:p></span></div><br /><div style="background: white; margin-bottom: 0pt;"><span style="color: #1a1a1a;">However, even though they are not identical, a court could still find that there was copyright infringement if the songs are “substantially similar.” </span><span style="background: white; color: black;">In U.S. copyright law,<span class="apple-converted-space">&nbsp;</span><span style="mso-bidi-font-weight: bold;">substantial similarity</span><span class="apple-converted-space">&nbsp;</span>is the standard used to determine whether copyright infringement has occurred.<span style="mso-spacerun: yes;">&nbsp; </span>The standard arises out of the recognition that the exclusive right to make copies of a work would be meaningless if<span class="apple-converted-space">&nbsp;</span></span><a href="http://en.wikipedia.org/wiki/Copyright_infringement" title="Copyright infringement"><span style="background: white; color: #0b0080; text-decoration: none; text-underline: none;">infringement</span></a><span class="apple-converted-space"><span style="background: white; color: black;">&nbsp;</span></span><span style="background: white; color: black;">was limited to making only identical reproductions of a work.</span><span style="color: #1a1a1a;"> A New York Times critic<span class="apple-converted-space">&nbsp;</span></span><a href="http://www.nytimes.com/2013/08/03/arts/music/blurred-lines-makes-robin-thicke-white-souls-leader.html?_r=0" target="_blank"><span style="color: windowtext; text-decoration: none; text-underline: none;">noted</span></a><span style="color: #222222;">&nbsp;th</span><span style="color: #1a1a1a;">at "Blurred Lines" is "influenced heavily" by Gaye’s “Got To Give It Up,” but the lawsuit makes the point that "being reminiscent of a 'sound' is not copyright infringement. The intent in producing 'Blurred Lines' was to evoke an era." Moreover, a NYU professor and expert musicologist,&nbsp;Ron Sadoff,&nbsp;compared the two songs and found:&nbsp;</span><span style="color: #222222; font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><o:p></o:p></span></div><br /><div style="background: white; margin-bottom: 0pt;"><span style="color: #1a1a1a;">&nbsp;&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp;"Thicke’s 'Blurred Lines<i>'</i>&nbsp;may have been inspired by Marvin Gaye’s 'Got To Give It <span style="mso-tab-count: 1;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Up,'<span class="apple-converted-space">&nbsp;</span>&nbsp;&nbsp;but the songs’ respective ‘touch and feel,’ as well as their use of structural <span style="mso-tab-count: 1;"> </span>musical<span class="apple-converted-space">&nbsp;</span>materials, are common to many popular songs. From a musicological <span style="mso-tab-count: 1;">&nbsp; </span>perspective, the<span class="apple-converted-space">&nbsp;</span>songs share even less similarities in terms of their use of structural&nbsp;materials such as<span class="apple-converted-space">&nbsp;</span>melody and harmony. 'Blurred Lines' is composed squarely within the&nbsp;major mode, while<span class="apple-converted-space">&nbsp;</span>'Got To Give It Up'&nbsp;revolves around the blues scale.&nbsp; In this key area&nbsp;of melodic content,<span class="apple-converted-space">&nbsp;</span>there doesn’t appear to be evidence that would suggest plagiarism on&nbsp;the part of Robin Thicke."</span><span style="color: #500050; font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><o:p></o:p></span></div><br /><div style="background: white; margin-bottom: 0pt;"><span style="color: #500050; font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;">&nbsp;<o:p></o:p></span></div><u><span style="color: #1a1a1a;">THE "STANDING" ISSUE</span></u><span style="color: #500050; font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><o:p></o:p></span><br /><br /><div style="background: white; margin-bottom: 0pt;"><span style="color: #222222;">But the court may never get to the issue of substantial similarity because Thick may have a strong argument that the Gaye estate has no right to sue him. This is why:&nbsp; "Got To Give It Up" was written by Marvin Gaye. But the publisher of the song is EMI. Last year EMI was acquired by a consortium lead by Sony ATV, the music publishing component of Sony. Sony ATV is also Pharrell's music publisher. As such Sony is earning money from both songs. And this is the reason that Sony did not join the Gaye estate in seeking redress for the infringement of "Got To Give It Up" -- they are making money from both songs!</span><span style="color: #222222; font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><o:p></o:p></span></div><br /><div style="background: white; margin-bottom: 0pt;">Now here is the problem for the Gay estate: A typical publishing contract contains the following provision:<span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><o:p></o:p></span></div><br /><div style="background: white; margin-bottom: 0pt;">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp;“Grant of Rights: “Writer hereby irrevocably sells, transfers, conveys, grants and <span style="mso-tab-count: 1;">&nbsp; </span>assigns,&nbsp;in perpetuity, for the Territory, the following to Publisher (and Publisher's&nbsp;assignee(s) and other successors-in-interest):&nbsp;<span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><o:p></o:p></span></div><br /><div style="background: white; margin-bottom: 0pt;">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;&nbsp;All existing or potential causes of actions and claims with respect to the&nbsp;Publisher's <span style="mso-tab-count: 1;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>acquired interests in and to the Compositions (and the right of&nbsp;substitution in connection <span style="mso-tab-count: 1;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>therewith).”<span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;; font-size: 10pt;"><o:p></o:p></span></div><br /><div style="background: white; margin-bottom: 0pt;"><span style="color: #222222;">If Marvin Gaye's publishing agreement included a clause like this, only EMI's successor would have the right to sue Thicke and Pharrell. And since Sony ATV is making money from both songs, they have no interest in making a claim. So Marvin Gaye's estate may have no "standing" to sue for copyright infringement, and Thicke and Pharrell may get their declaratory judgment whether the two songs are "substantially similar", or not.<o:p></o:p></span></div><br /><div style="background: white; margin-bottom: 0pt;"><span style="color: #222222;">(In his lawsuit for a declaratory judgment Thicke also</span><span style="background: white; color: #1a1a1a;"> requested a similar judgment with regard to another accusation, by Bridgeport Music Inc., that "Blurred Lines" infringed on George Clinton's "Sexy Ways."&nbsp;George Clinton whose catalogue was acquired by Bridgeport has publicly denied that Thicke and Pharrell copied “Sexy Ways”) </span><span style="color: #222222;"><o:p></o:p></span></div><br /><div style="background: white;">…………………………………………………….<o:p></o:p></div><br /><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><o:p>&nbsp;</o:p></div>Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com0tag:blogger.com,1999:blog-3486088391463104302.post-2626536160233732692013-07-03T12:06:00.001-07:002013-07-03T12:06:30.064-07:00How to Avoid Getting Completely Screwed by a 360 Degree Deal...<div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;">360 degree deals present&nbsp;<strong style="border: 0px; margin: 0px; outline: 0px; padding: 0px;">major disadvantages</strong>&nbsp;for artists, but faced with a choice of the 360 versus no deal, the&nbsp;360 may be worth accepting - but&nbsp;<strong style="border: 0px; margin: 0px; outline: 0px; padding: 0px;">only</strong>&nbsp;if properly negotiated and&nbsp;<strong style="border: 0px; margin: 0px; outline: 0px; padding: 0px;">only</strong>&nbsp;if the major pitfalls&nbsp;touched upon in this article are avoided.</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;">First, let me give every artist and manager a quick primer on what a 360 degree deal is. &nbsp;Basically, the 360 is an exclusive recording contract between a record company and an artist in&nbsp;which, in addition to monies from sales of the artist's recorded music, the label shares in other&nbsp;income streams such as touring and live performance, merchandise, endorsements, appearances&nbsp;in movies and TV, and if the artist also writes songs, publishing.</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><h2 style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: xx-large; font-weight: normal; margin: 0px; outline: 0px; padding: 8px 0px 0px 30px;">In fact, most 360 deals have&nbsp;catch-all phases giving the label a financial interest in everything else that the artist does in the&nbsp;entertainment business.&nbsp;</h2><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;">A traditional recording agreement only provides an income stream for&nbsp;the label from record sales. &nbsp;But similar to the traditional recording agreement, under the 360 deal&nbsp;the label acquires the copyrights in the artist's recordings and options for multiple albums. &nbsp;The&nbsp;360 deal also usually includes all the same deductions from record royalties as the traditional&nbsp;deal, including producer royalties and reductions for packaging, "net sales," foreign sales, midprice and budget records, and even "new technology." (originally applied to CD royalties and&nbsp;now to digital sales).&nbsp;</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><h2 style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: xx-large; font-weight: normal; margin: 0px; outline: 0px; padding: 8px 0px 0px 30px;">The traditional recording agreement had a lot of bad stuff in it for the artist.&nbsp;The 360 deal usually has all of that, and a lot more. &nbsp;&nbsp;</h2><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><h2 style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: xx-large; font-weight: normal; margin: 0px; outline: 0px; padding: 8px 0px 0px 30px;"><span style="background-color: #fbac0a; border: 0px; font-size: 32px; margin: 0px; outline: 0px; padding: 0px;">Origins &amp; Reason D'Etra</span></h2><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;">The 360 deal is not new. &nbsp;The first reported one was English recording star Robbie Williams' deal&nbsp;with EMI in 2002. &nbsp;But in the last few years 360 deals have become common place. &nbsp;New artists&nbsp;signing with a major label or their affiliates can expect it as a matter of course.&nbsp; The reason for&nbsp;the prevalence of the 360 deal is the dramatic decline in income from sales of recorded music. &nbsp;</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;">Income from sales of pre-recorded music reached its peak in 1999 at approximately 14.5 billion&nbsp;dollars. &nbsp;By 2012 that amount had shrunk to only approximately $7 billion --&nbsp; a decline of more&nbsp;than 50% not accounting for inflation. &nbsp;</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><h2 style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: xx-large; font-weight: normal; margin: 0px; outline: 0px; padding: 8px 0px 0px 30px;">This is the reason that labels began to pursue income from&nbsp;sources that would have once been sacrosanct to the artist.&nbsp;</h2><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;">Under the traditional paradigm, the label would pay the artist a small royalty which was even&nbsp;smaller after all the deductions. &nbsp;The artist could expect to receive no recording royalty at&nbsp;all unless his album was a major commercial success.&nbsp;&nbsp;<strong style="border: 0px; margin: 0px; outline: 0px; padding: 0px;">But he got to keep everything else:</strong>&nbsp;publishing, merch, touring, endorsements, etc.&nbsp;</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;">However, these days artists often generate more&nbsp;money from other activities than record sales. &nbsp;For instance, Lady Gaga's Monster Ball Tour&nbsp;grossed over $227 million dollars, and 50 Cent's deal with Vitamin Water turned golden when&nbsp;he accepted shares in the company in exchange for authorizing the use of his professional name&nbsp;in "Formula 50". &nbsp;</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><h2 style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: xx-large; font-weight: normal; margin: 0px; outline: 0px; padding: 8px 0px 0px 30px;">It is reported that his shares were worth over $100 million after Coca-Cola purchased Vitamin Water's parent, Glacéau, for $4.1 billion.</h2><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;">These developments have spurred the labels to seek to participate in all the possible revenue&nbsp;streams generated by an artist.&nbsp; In my own practice, I have seen small labels also known as&nbsp;production companies get in on the act and insist that new artists sign 360 deals with them even&nbsp;if they put little or no money into recording and make no promises in regard to marketing or&nbsp;promotion. &nbsp;These companies expect the artist to provide fully mastered recordings for little or&nbsp;no money upfront, and they demand income from all sources of revenue.</div><h2 style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: xx-large; font-weight: normal; margin: 0px; outline: 0px; padding: 8px 0px 0px 30px;">Bottom line: these are&nbsp;horrible deals.&nbsp;</h2><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><h2 style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: xx-large; font-weight: normal; margin: 0px; outline: 0px; padding: 8px 0px 0px 30px;"><span style="background-color: #fbac0a; border: 0px; font-size: 32px; margin: 0px; outline: 0px; padding: 0px;">The label's argument</span></h2><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;">Record labels argue (and majors who pay big advances have more credibility in making these&nbsp;arguments) that they make significant investments in an artist's career by, among other things,&nbsp;putting up considerable sums for recording including paying advances to A-level producers,&nbsp;getting the artist's music on commercial radio, securing invitations for the artists to perform&nbsp;on popular television shows, paying for one or more top quality videos for YouTube and other&nbsp;outlets, and providing tour support before the artist is popular enough to demand significant&nbsp;sums for live performances.&nbsp;</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;">For emerging artists, a major label deal may be the path to becoming&nbsp;famous and rich. &nbsp;For instance, Lady Gaga was a virtual unknown before Interscope spent a vast&nbsp;sum putting her on tour as an opening act for the New Kids on the Block, paying for marketing&nbsp;(particularly to the gay community), hiring wardrobe and makeup, and paying all her other&nbsp;expenses for over a year, not to mention using their clout to get her invited as a guest on almost&nbsp;every important radio station in the country.</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><h2 style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: xx-large; font-weight: normal; margin: 0px; outline: 0px; padding: 8px 0px 0px 30px;">The labels argue that 360 deals are fair because&nbsp;monies generated from touring, merch, endorsements, and other streams would not exist at all&nbsp;without their efforts.&nbsp;</h2><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;">Many artists and their representatives would contend that it isn’t their fault that the labels are&nbsp;making less money from their records. &nbsp;360 deals, they would maintain, are just a cynical money&nbsp;grab by record companies who are facing dwindling income from recorded music because they&nbsp;have failed to react appropriately to the changing industry. &nbsp;Asking artists to foot the bill hardly&nbsp;seems fair. &nbsp;But the reality is that since all the major labels and affiliates usually demand 360&nbsp;terms,&nbsp;<strong style="border: 0px; margin: 0px; outline: 0px; padding: 0px;">the artist may not have much choice</strong>. Given that reality, let’s discuss how the artist's&nbsp;attorney can improve the deal.&nbsp;</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><h2 style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: xx-large; font-weight: normal; margin: 0px; outline: 0px; padding: 8px 0px 0px 30px;"><span style="background-color: #fbac0a; border: 0px; font-size: 32px; margin: 0px; outline: 0px; padding: 0px;">How to improve the deal.</span></h2><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;">The ability of the artist’s attorney to improve a 360 depends on the artist's leverage as much as&nbsp;the lawyer's knowledge and negotiating skills. For instance, if there is a bidding war among two&nbsp;or more labels, the lawyer's ability to improve the deal increases immensely.&nbsp; If the artist is&nbsp;already making significant income from live shows, if not from record sales, this can also aid the&nbsp;lawyer in negotiating better terms or at least carving out those areas where the artist is already&nbsp;earning money from the 360 deal.</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><h2 style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: xx-large; font-weight: normal; margin: 0px; outline: 0px; padding: 8px 0px 0px 30px;"><span style="background-color: #fbac0a; border: 0px; font-size: 32px; margin: 0px; outline: 0px; padding: 0px;">Carve-outs</span></h2><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;">If an artist is already earning revenues from a particular source, the lawyer should try to carve&nbsp;that stream out of the 360 deal. For instance, certain EDM artists are earning tens to hundreds&nbsp;of thousands of dollars playing large venues and festivals. If a label wants this kind of artist, it&nbsp;should be prepared to forego tapping into live performance income as they had&nbsp;<strong style="border: 0px; margin: 0px; outline: 0px; padding: 0px;">nothing to do&nbsp;with creating it</strong>.&nbsp;</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><h2 style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: xx-large; font-weight: normal; margin: 0px; outline: 0px; padding: 8px 0px 0px 30px;">Get the label to work for the money or at least pay advances for each stream.&nbsp;</h2><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;">In an interview about 360 deals with entertainment attorney Elliot Resnick (on Youtube,&nbsp;<a href="http://youtu.be/vY60E_5CSvA" style="border: 0px; color: #146a9d; margin: 0px; outline: none; padding: 0px;">here</a>) we referred to the splits in a form agreement that he supplied. The contract&nbsp;provided that the label’s take for various streams was as follows:</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px 0.5em 30px;">• 50% Merch</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px 0.5em 30px;">• 25% Touring and live performance</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px 0.5em 30px;">• 25% of "digital products" such as ringtones and sales from the artist’s fan site</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px 0.5em 30px;">• 25% Publishing</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px 0.5em 30px;">• 25% of Endorsements&nbsp;</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px 0.5em 30px;">• 25% of any other income from the entertainment business including appearances on TV&nbsp;and movies, theatre, book publishing, etc.</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;">These above percentages are typical but the actual amounts vary from deal to deal. Whatever the&nbsp;splits are, the artist's attorney should try to get the label to commit to&nbsp;<strong style="border: 0px; margin: 0px; outline: 0px; padding: 0px;">doing something to deserve&nbsp;a share of each income stream</strong>. For instance, in return for its 25% the label should commit to&nbsp;manufacture merch and sell it at retail, via the Internet and supply the artist with merch for sales&nbsp;on tour.</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><h2 style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: xx-large; font-weight: normal; margin: 0px; outline: 0px; padding: 8px 0px 0px 30px;"><span style="background-color: #fbac0a; border: 0px; font-size: 32px; margin: 0px; outline: 0px; padding: 0px;">Points about publishing.</span></h2><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;">In regard to publishing, a 360 deal may include a "co-publishing" agreement in which&nbsp;the label has exclusive control of any songs that the artist writes during the term, and the label&nbsp;retains 25% of any monies generated from the songs. &nbsp;Or, the label may demand 100% of the "publisher's share" or 50% of all income generated by the artist’s songs. &nbsp;In exchange for either&nbsp;of these arrangements, which are major gives, the label should have a&nbsp;<strong style="border: 0px; margin: 0px; outline: 0px; padding: 0px;">dedicated staff</strong>&nbsp;committed&nbsp;to collecting monies generated by the artists songs, and that can&nbsp;<strong style="border: 0px; margin: 0px; outline: 0px; padding: 0px;">pitch the songs</strong>&nbsp;to other artists&nbsp;for covers and music supervisors for placements in movies, television, video games, etc.&nbsp;</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><h2 style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: xx-large; font-weight: normal; margin: 0px; outline: 0px; padding: 8px 0px 0px 30px;"><span style="background-color: #fbac0a; border: 0px; font-size: 32px; margin: 0px; outline: 0px; padding: 0px;">Aggressively negotiating advances</span></h2><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;">If the label is not equipped to provide support in respect to any income stream, or even if it is, the&nbsp;lawyer should try to&nbsp;<strong style="border: 0px; margin: 0px; outline: 0px; padding: 0px;">exact advances for each stream</strong>. The ideal would be if the lawyer can also&nbsp;negotiate that as soon as the label recoups each advance for each income stream the label's right&nbsp;to commission that income stream terminates. &nbsp;For instance, if the label advances $25,000 against&nbsp;a 25% commission for branding and endorsements and the artist gets an endorsement deal for&nbsp;$100,000, the artist would pay $25,000 to the label (25% of $100,000), but thereafter the label&nbsp;would not be entitled to any more money from that income stream.</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><h2 style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: xx-large; font-weight: normal; margin: 0px; outline: 0px; padding: 8px 0px 0px 30px;"><span style="background-color: #fbac0a; border: 0px; font-size: 32px; margin: 0px; outline: 0px; padding: 0px;">Avoid Cross-collateralization &nbsp;</span></h2><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;">Just as important as negotiating for the label's commitment to earn its keep for each stream&nbsp;and to pay advances for each stream, the lawyer should make sure that the label&nbsp;<strong style="border: 0px; margin: 0px; outline: 0px; padding: 0px;">cannot cross-collateralize each stream</strong>. &nbsp;This means that the label should not be able to take money from one&nbsp;stream to pay for unrecouped balances for another. &nbsp;For instance, if the label pays $100,000 for&nbsp;recording costs and the artist's royalty after deductions is 50 cents for an album that sells at&nbsp;$12.00, the artist must sell 200,000 albums to break even. &nbsp;</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;">Now, suppose the artist only sells 100,000&nbsp;(still a considerable feat in today’s market), and his income from touring is $50,000, if the&nbsp;contract allows the label to cross collateralize the various streams, the $50,000 will be applied to&nbsp;the "red balance" in his recording royalty account. &nbsp;This means the artist would receive nothing&nbsp;from touring —&nbsp;<strong style="border: 0px; margin: 0px; outline: 0px; padding: 0px;">the monies would be applied to the unrecouped recording costs.</strong></div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><h2 style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: xx-large; font-weight: normal; margin: 0px; outline: 0px; padding: 8px 0px 0px 30px;"><span style="background-color: #fbac0a; border: 0px; font-size: 32px; margin: 0px; outline: 0px; padding: 0px;">Net versus Gross</span></h2><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;">If the artist must shell out a percentage of his touring or merch or other income to the labels, her&nbsp;lawyer has to insure that the percentage is based on&nbsp;<strong style="border: 0px; margin: 0px; outline: 0px; padding: 0px;">net, not gross</strong>. &nbsp;For instance, if a tour earns&nbsp;the artist $25,000 but her expenses added up to $20,000 (for hotels, transportation, booking&nbsp;agent fees, sound and lighting, etc.), the label should only commission the $5,000 in profits not&nbsp;the entire $25,000. &nbsp;Indeed, if the label's commission was 25% and that was based on gross, the&nbsp;amount due to the label would actually<strong style="border: 0px; margin: 0px; outline: 0px; padding: 0px;">exceed the artist's profit</strong>. &nbsp;</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><h2 style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: xx-large; font-weight: normal; margin: 0px; outline: 0px; padding: 8px 0px 0px 30px;"><span style="background-color: #fbac0a; border: 0px; font-size: 32px; margin: 0px; outline: 0px; padding: 0px;">In Summary</span></h2><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;">As I mentioned earlier, 360 deals&nbsp;<strong style="border: 0px; margin: 0px; outline: 0px; padding: 0px;">generally suck</strong>&nbsp;for artists. &nbsp;But it may be worth accepting - but only if properly negotiated and only if the major pitfalls&nbsp;touched on in this article are avoided.&nbsp; Obviously the artist should never enter into any exclusive&nbsp;recording contract, let alone a 360 deal, without the assistance of capable counsel.</div><div style="background-color: white; border: 0px; color: #464848; font-family: Tahoma, Geneva, sans-serif; font-size: 13px; line-height: 18px; outline: 0px; padding: 0.5em 0px;"><br /></div>Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com1tag:blogger.com,1999:blog-3486088391463104302.post-51834509365840529052013-06-14T09:38:00.002-07:002013-06-14T09:38:45.973-07:00Music Streaming Subscription: Strategies for Success<div class="MsoNormal" style="background: white; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: #222222; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">The New Music Seminar kicked off on Monday (6/10) at the New Yorker Hotel in NYC. In synch with the optimistic view on the future of the music business of NMS' founder, Tom Silverman, one of the discussions was titled:&nbsp;<b>Music Subscription: Getting To A Billion – Building A Strategy For Success</b>.<o:p></o:p></span></div><div class="MsoNormal"><span style="color: #222222; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">The conference notes posed the following question: "Subscription music is the fastest growing part of the music business. There are 100 million television subscriptions at an average of $79 per month in the US. SiriusXM has 24.4 million U.S. subscribers at rates of $14.95 per month. There are 321 million mobile subscriptions in the US. <i>How can the music industry work with subscription services to drive subscriptions to 100 million and beyond?"</i>&nbsp; <o:p></o:p></span></div><div class="MsoNormal"><span style="color: #222222; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">The speakers included:&nbsp;</span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;"><o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 47.25pt; mso-list: l1 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 10.0pt; mso-bidi-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-fareast-font-family: Symbol;">·<span style="font-family: 'Times New Roman'; font-size: 7pt;">&nbsp; </span></span><!--[endif]--><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">Jim Cady (President &amp; CEO, Slacker)<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 47.25pt; mso-list: l1 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 10.0pt; mso-bidi-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-fareast-font-family: Symbol;">·<span style="font-family: 'Times New Roman'; font-size: 7pt;">&nbsp; </span></span><!--[endif]--><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">Jon Irwin (President, Rhapsody)<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 47.25pt; mso-list: l1 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 10.0pt; mso-bidi-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-fareast-font-family: Symbol;">·<span style="font-family: 'Times New Roman'; font-size: 7pt;">&nbsp; </span></span><!--[endif]--><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">Sachin Doshi (Head of Development and Analysis, Spotify)<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;"><span style="color: #222222; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">Perhaps the answer posed by the title of the panel is iTunes Radio. Apple announced that it had concluded deals with the major labels the same day as this panel. Since the announcement occurred on the same day, the speakers did not focus on it. T</span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">he only relevant remark was made by Jim Cady who opined optimistically that the more water in the pond the higher all the boats will float. However, &nbsp;if iPhones come out bundled with iTunes Radio, a more realistic view is that it the water may get so high that it sinks some of those boats. In fact, Jon Irwin of Rhapsody predicted that of the 12 or so major screening services he thinks, eventually the field would consolidate to less than a handful. He also announced that Rhapsody just launched in 14 European countries. Could they be setting themselves up to be purchased just as they purchased Napster from Best Buy?<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;"><span style="background: white; color: #222222; font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt;">Whether the number of streaming services shrinks or not, artists and songwriters should be well represented when they negotiate their deals. Their lawyers should make sure that publishers and labels agree to pro-rate advances and royalties received from any streaming service. The standard agreement usually states that if the record company or publishers receive advances and/or royalties for licensing their entire catalogue they don’t have to share any of those monies with individual artists or songwriters. But licensing their entire catalogue is exactly what the labels and publishers do with the streaming services. </span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;"><o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">Other highlights are as follows:<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 47.25pt; mso-list: l4 level1 lfo2; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 10.0pt; mso-bidi-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-fareast-font-family: Symbol;">·<span style="font-family: 'Times New Roman'; font-size: 7pt;">&nbsp; </span></span><!--[endif]--><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">Strategies for success: Sachin Doshi remarked that Spotify's strategy is to create the most robust music service possible to compete with the pirates and to hold enough back from Spotify's free service to induce paid subscriptions. The thought of eliminating all those irritating ads comes to mind, as well as access from your mobilephone.&nbsp;However, of Spotify’s 24 million listeners in the U.S. only approximately 20% are paying for the premium service at present.<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 47.25pt; mso-list: l0 level1 lfo3; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 10.0pt; mso-bidi-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-fareast-font-family: Symbol;">·<span style="font-family: 'Times New Roman'; font-size: 7pt;">&nbsp; </span></span><!--[endif]--><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">The speakers traded notes on the mix between the Internet Radio non-interactive offerings and interactivity. Rhapsody is 80% interactive per Jon Irwin whereas Slacker is the opposite: 80% of Slacker’s listeners use &nbsp;the Internet radio function.<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 47.25pt; mso-list: l3 level1 lfo4; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 10.0pt; mso-bidi-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-fareast-font-family: Symbol;">·<span style="font-family: 'Times New Roman'; font-size: 7pt;">&nbsp; </span></span><!--[endif]--><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">&nbsp;According to the moderator of the panel, Stephen Bryan (EVP of Digital Strategy and Business Development at Warner), the success of the streaming services vary from territory to territory. In the Nordic countries the majority of users are paying for the premium service. In the U.S. it’s still a small minority and in places like India and China paying for premium streaming services is almost unheard of. Hopefully, Bryan noted, one day this will start to change as hundreds of millions of people in these countries now own smart phones.&nbsp;Sachin Doshi pointed out that dealing with mobile carriers in emerging markets is especially "challenging" because in some countries one mobile carrier has a monopoly and therefore have huge bargaining power. &nbsp;<o:p></o:p></span></div><div class="MsoNormal" style="margin-left: 47.25pt; mso-list: l2 level1 lfo5; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list .5in; text-indent: -.25in;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 10.0pt; mso-bidi-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-fareast-font-family: Symbol;">·<span style="font-family: 'Times New Roman'; font-size: 7pt;">&nbsp; </span></span><!--[endif]--><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">Bryan also gave his tips for success in the Streaming space<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; - &nbsp;Superior user experience compared to pirates;<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .75in; margin-right: 0in; margin-top: 0in; text-indent: -.25in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">- &nbsp;Mass market penetration. This means “hard bundling” with large mobile services so<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">that the music service is included in the monthly mobile subscription so the music seems free. In fact, Muve is already doing this with the mobile carrier Cricket;<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: .5in; margin-right: 0in; margin-top: 0in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">- &nbsp;Avoid "pain points". For instance, if the music service is not hard bundled with the &nbsp;&nbsp;monthly payment for mobile service, then make the premium payment easy to make by allowing the user to click on a button that would make the payment show up as an additional charge on the user’s monthly bill; and &nbsp;<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 33.0pt; margin-right: 0in; margin-top: 0in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">- &nbsp;Price along the demand curve: Recognize some people will never pay and some will pay readily. The rest have to be tempted with enough value to prompt them to pay.<o:p></o:p></span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;"><br /></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">Jon Irwin at Rhapsody added that presenting an archive of millions of songs will not suffice. Rhapsody prides itself on guiding users to music that they never heard of but may enjoy based on past listening. At Slacker, Jim Cady noted that Slacker uses several Rock &amp; Roll Hall of Famers to program some of its playlists. &nbsp;&nbsp;<o:p></o:p></span></div><div class="MsoNormal"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">Jon Irwin also pointed out that in the last 3 1/2 years enhancements in networks (4G) have made access to the streaming services easier. Also the population of smart phones has exploded making the prospective audience for streaming services much bigger. <o:p></o:p></span></div><div class="MsoNormal" style="background: white; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12.0pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">After the seminar I asked Jon Irwin how Rhapsody handled the complex and expensive licensing issues that arise in Europe that have persuaded Pandora not to launch there. He said it was a tough challenge because of the multiplicity of stake holders (each of the local European societies want to collect a royalty for streaming in their country, and certain major publishers will only license directly). But he said he had the assistance of six capable in house attorneys, and at the end of the day licensing costs were commensurate with what Rhapsody pays the copyright owners in the U.S. &nbsp;Score one point for the lawyers.</span></div><div class="MsoNormal"><br /></div>Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com0tag:blogger.com,1999:blog-3486088391463104302.post-43220336713330388872013-06-04T12:47:00.001-07:002013-06-04T12:47:08.734-07:00Interview with Tom Silverman --- New Music Seminar<span style="font-family: Times, Times New Roman, serif;">I wanted to share with you a podcast that we recorded earlier today with Tom Silverman, head of Tommy Boy Records and the New Music Seminar. The Seminar, which starts June 9th in NYC, will feature over 100 artists playing in half a dozen clubs in downtown New York during the evening, as well as conversations at the New Yorker Hotel during the day with many of the leading players in the music business. Tom discusses the highlights of the Seminar, as well as providing a uniquely optimistic perspective on the future of the recording industry. You can listen to the podcast by clicking on<a href="http://youtu.be/2gEJByMbfg8" target="_blank"> http://youtu.be/2gEJByMbfg8</a>. And you can register for the seminar at <a href="http://newmusicseminar.com/registration">newmusicseminar.com/registration</a> with this code NMSSGPD13 for a 25% discount.</span>Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com0tag:blogger.com,1999:blog-3486088391463104302.post-12373779965709365312012-12-14T16:29:00.001-08:002012-12-14T17:55:56.928-08:00DOES REGISTERING MULTIPLE WORKS IN A SINGLE APPLICATION LIMIT REMEDIES FOR COPYRIGHT INFRINGEMENT?<span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">Much confusion surrounds the issue of whether one can register multiple works in a single copyright registration application. <span style="mso-spacerun: yes;">&nbsp;</span>One theory is that if an author of creative works such as photographs or songs, registers more than one work in the same application, her entitlement to statutory damages may be compromise<span style="mso-spacerun: yes;">&nbsp;&nbsp; </span>ed. For example, I recently spoke to a colleague specializing in art law whose understanding was that if a visual artist registered ten paintings using a single application, and only one of them was infringed, the artist’s remedy may be limited to one-tenth of the maximum statutory damage award of $150,000. <span style="mso-spacerun: yes;">&nbsp;</span>Fortunately for visual artists, as well as other creators, this is not true. If a single application for more than one work is properly completed, visual artists, writers, composers, recording artists and other creators can retain all the legal remedies afforded by the Copyright Act while saving money by avoiding multiple registration fees ($35 for each on-line application and $65 for each paper application). <o:p></o:p></span><br /><br /><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">This article explains the rules pertaining to filing registrations for multiple works. We also explain special rules that Congress passed and the Copyright Office implemented to make it easier for creators, such as illustrators, freelance writers, cartoonists and others, who usually publish their works in different magazines and newspapers on different dates, to register their works in groups. Then we will discuss another special rule for photographs that was specifically designed to make it easier for owners of copyrights in photographs to register their work in groups. <span style="mso-spacerun: yes;">&nbsp;</span>Finally, we will discuss mistakes to avoid, and circumstances under which it advisable <span style="mso-spacerun: yes;">&nbsp;&nbsp;</span>to file separate registrations for individual works.<span style="mso-spacerun: yes;">&nbsp;&nbsp; </span><o:p></o:p></span></div><br /><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">Why Registration Is Important<o:p></o:p></span></b></div><br /><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;">Before exploring the rules regarding how to save </span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%;">money by registering multiple works in a single registration, it is useful to review why registration is important. Under the Copyright Act of 1976, a copyright comes into existence as soon as a work is fixed in a tangible medium of expression, and registration is not a condition of copyright protection. So why bother to register?<span style="mso-spacerun: yes;">&nbsp; </span>Even though registration is not a requirement for protection, the copyright law provides several inducements to encourage copyright owners to register their works. <span style="mso-spacerun: yes;">&nbsp;</span>The Copyright Office’s Circular entitled Copyright Basics (http://www.copyright.gov/circs/circ01.pdf) outlines those advantages as follows:</span><span style="font-family: &quot;Palatino Linotype&quot;,&quot;serif&quot;; font-size: 10.5pt; line-height: 115%;"><o:p></o:p></span></div><span style="font-family: &quot;MinionC&quot;,&quot;serif&quot;; font-size: 10pt; mso-bidi-font-family: MinionC;"><span style="mso-tab-count: 1;">&nbsp;&nbsp;<span style="font-size: small;">&nbsp; </span></span></span><br /><span style="font-size: small;"><span style="font-family: &quot;MinionC&quot;,&quot;serif&quot;; font-size: 10pt; mso-bidi-font-family: MinionC;">-&nbsp;&nbsp;Registration establishes a public record of the copyright claim.</span></span><span style="font-size: small;"></span><br /><span style="font-size: small;"><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: left;">&nbsp;</div><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: left;"><span style="font-size: x-small;"><span style="font-family: &quot;MinionC&quot;,&quot;serif&quot;; font-size: 10pt; mso-bidi-font-family: MinionC;"><span style="mso-tab-count: 1;">-&nbsp;</span> Before an infringement suit may be filed in court, registration is necessary for works of </span></span><span style="font-family: &quot;MinionC&quot;,&quot;serif&quot;; font-size: 9.5pt; mso-bidi-font-family: MinionC;">U. S. </span><span style="font-family: &quot;MinionC&quot;,&quot;serif&quot;; font-size: 10pt; mso-bidi-font-family: MinionC;">origin.</span></div><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; mso-layout-grid-align: none; text-align: left;"><span style="font-family: &quot;MinionC&quot;,&quot;serif&quot;; font-size: 10pt; mso-bidi-font-family: MinionC;"><o:p></o:p></span>&nbsp;</div><div style="text-align: left;"><span style="font-family: &quot;MinionC&quot;,&quot;serif&quot;; font-size: 10pt; mso-bidi-font-family: MinionC;"><span style="mso-tab-count: 1;">-&nbsp;</span>&nbsp;If made before or within five years of publication, registration will establish prima facie evidence in court&nbsp;of the validity of the copyright and of the facts stated in the certificate.</span></div><div style="text-align: left;">&nbsp;</div><div style="text-align: left;"><span style="font-size: x-small;">- &nbsp;<span style="font-family: &quot;MinionC&quot;,&quot;serif&quot;; font-size: 10pt; mso-bidi-font-family: MinionC;">If registration is made within three months after publication of the work or prior to an infringement of the&nbsp;work, statutory damages and attorney’s fees will be available to the copyright owner in court actions.&nbsp;Otherwise, only an award of actual damages and profits is available to the copyright owner.</span></span></div><div style="text-align: left;"><span style="font-size: x-small;"></span>&nbsp;</div><div style="text-align: left;"><span style="font-family: &quot;MinionC&quot;,&quot;serif&quot;; font-size: 10pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: MinionC; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">&nbsp;-&nbsp; Registration allows the owner of the copyright to record the registration with the </span><span style="font-family: &quot;MinionC&quot;,&quot;serif&quot;; font-size: 9.5pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: MinionC; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">U. S. </span><span style="font-family: &quot;MinionC&quot;,&quot;serif&quot;; font-size: 10pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-font-family: MinionC; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">Customs Service for protection against the importation of infringing copies. </span></div><div style="text-align: left;"></div></span><br /><div style="text-align: left;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%;">Of the reasons to register set forth above, the most important are that (i) a copyright owner cannot start a lawsuit for copyright infringement before registering, and (ii) cannot secure statutory damages or attorneys’ fees without registering. Copyright law provides for statutory damages of up to $150,000 per infringement, but if the work has been published (see the discussion below on the meaning of publication), statutory damages are only available if registration occurred <i style="mso-bidi-font-style: normal;">prior</i> to the infringement. <span style="mso-spacerun: yes;">&nbsp;</span>Otherwise, the plaintiff must prove actual damages, which can be difficult to quantify, or may equal a negligible amount unless the defendant earned a significant amount of money from the infringing work. <span style="mso-spacerun: yes;">&nbsp;</span>Also attorneys’ fees are only available for published works that are registered prior to the infringement. Similar to other litigation, a lawsuit for copyright infringement can take a great deal of work and time on the part of the attorney. It would be difficult to retain the services of an experienced copyright litigator without the potential for recovering attorney’s fees. </span><span style="font-family: &quot;Palatino Linotype&quot;,&quot;serif&quot;; font-size: 10.5pt; line-height: 115%;"><o:p></o:p></span></div><div style="text-align: left;">&nbsp;</div><div style="text-align: left;">&nbsp;</div><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: left;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">Basic Rules for Registering Multiple Works in a Single Application <o:p></o:p></span></b></div><div style="text-align: left;">&nbsp;</div><div style="text-align: left;">&nbsp;</div><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: left;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">The basic rules pertaining to copyright <span style="mso-spacerun: yes;">&nbsp;</span>registration, are set forth in the Copyright Office "Basics" circular&nbsp;</span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">as follows: <o:p></o:p></span></div><div style="text-align: left;"></div><div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: left;"><span style="font-family: Calibri;"><i style="mso-bidi-font-style: normal;"><span style="mso-tab-count: 1;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>Basic claims include (1) a single work; (2) multiple unpublished works if the elements are&nbsp;</i></span><br /><span style="font-family: Calibri;"><i style="mso-bidi-font-style: normal;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <span style="mso-tab-count: 1;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>assembled in an orderly form; the combined elements bear a single title identifying the&nbsp;</i></span></div><div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: left;"><span style="font-family: Calibri;"><i style="mso-bidi-font-style: normal;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;collection&nbsp;<span style="mso-tab-count: 1;">&nbsp;</span>as a whole; the copyright claimant in all the elements and in the collection as a </i></span></div><div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: left;"><span style="font-family: Calibri;"><i style="mso-bidi-font-style: normal;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; whole is the&nbsp;same; and all the elements are by the same author or, if they are by different </i></span></div><div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: left;"><span style="font-family: Calibri;"><i style="mso-bidi-font-style: normal;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; authors, at least <span style="mso-tab-count: 1;">&nbsp;&nbsp; </span>one of the authors has contributed copyrightable authorship to each </i></span></div><div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: left;"><span style="font-family: Calibri;"><i style="mso-bidi-font-style: normal;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; element; and (3) multiple&nbsp;published works if they are all first published together in the same</i></span></div><div class="MsoNoSpacing" style="margin: 0in 0in 0pt; text-align: left;"><span style="font-family: Calibri;"><i style="mso-bidi-font-style: normal;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;publication on the same date&nbsp;<span style="mso-tab-count: 1;">&nbsp;</span>and owned by the same claimant.</i><em><span style="font-size: 12pt; font-style: normal; mso-bidi-font-style: italic;"><span style="mso-tab-count: 1;">&nbsp;&nbsp; </span><o:p></o:p></span></em></span></div><div style="text-align: left;"></div><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: left;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;"></span>&nbsp;</div><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: left;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;">These rules,</span><span style="color: white; font-family: &quot;Georgia&quot;,&quot;serif&quot;; font-size: 11.5pt; line-height: 115%; mso-bidi-font-weight: bold;"> </span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;">which are based on Section 408(c) of the Copyright Act and codified in the Code of </span><span style="font-family: &quot;Georgia&quot;,&quot;serif&quot;; font-size: 11.5pt; line-height: 115%; mso-bidi-font-weight: bold;">Federal Regulations Title 37, Part 202.3(b)(4)(i),</span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;"> are clear: registration of multiple works in a single application is fine, so long as all works were created by the same person,</span><a href="http://www.blogger.com/blog-this.g#_ftn1" name="_ftnref1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-fareast-font-family: &quot;Times New Roman&quot;;"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 11pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: &quot;Times New Roman&quot;; mso-fareast-language: EN-US;"><span style="color: blue;">[1]</span></span></span></span></span></span></a><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;"> and (i) if the works are unpublished, all of them may be registered in a single registration even if they were created at different times, (ii) if the works were published, those that were published for the first time in the same publication by the same claimant at the same time may be registered in a single registration. <o:p></o:p></span></div><br /><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">In my practice as a music attorney, I often register groups of songs and masters. For instance, if a client wrote and recorded his own songs for an album, I would register the entire album at the same time for one payment to the Copyright Office of $35. This saves time and money. And the registration protects each song and the recording of each song.<a href="http://www.blogger.com/blog-this.g#_ftn2" name="_ftnref2" style="mso-footnote-id: ftn2;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: &quot;Times New Roman&quot;; mso-fareast-language: EN-US;"><span style="color: blue;">[2]</span></span></span></span></span></a><span style="mso-spacerun: yes;">&nbsp; </span><span style="mso-spacerun: yes;">&nbsp;&nbsp;&nbsp;&nbsp;</span><o:p></o:p></span></div><br /><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;">With regard to the concept of publication, which distinguishes rule (2) from (3), <span style="mso-spacerun: yes;">&nbsp;</span>if the album were not commercially released I would register it as an “unpublished work,” or if it had been released commercially I would register it as a “published</span><span style="font-size: 12pt; line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;"><span style="font-family: Calibri;"> </span></span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;">work.” </span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%;">The 1976 Copyright Act defines publication as <span style="mso-bidi-font-style: italic;">“the distribution of copies or phonorecords of a work to the public by sale or other transfer of ownership, or by rental, lease, or lending.” 17 U.S.C § 101. For instance, a photograph is “published” if it is sold, mere public display is not publication. A musical recording is published if it is offered for sale. If the recording contains a new song, selling the record will cause the song to be published. So in reference to the example discussed above, if one of the songs was commercially released prior to the release of the rest of the album, I would register the “published” recording containing that song in a separate application and register the rest of the album as an “unpublished work” in a separate application. </span></span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;"><o:p></o:p></span></div><br /><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">Special Rules Applying to Creators who Publish their Works in Periodicals <o:p></o:p></span></b></div><br /><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">In addition to the rules set forth in the Copyright Basics Circular, Section 408(c)(2) of the Copyright Act directs the </span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt;">Register of Copyrights (i.e., the Director of the U.S. Copyright Office</span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt;">) to establish regulations<i style="mso-bidi-font-style: normal;"> </i>“permitting a single registration for a group of works by the same individual author, all first published as contributions to periodicals, including newspapers, within a twelve-month period, on the basis of a single deposit, application, and registration fee, …<i style="mso-bidi-font-style: normal;">” </i></span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">Pursuant to this provision in the Copyright Act, the Copyright Office issued the following regulation: "</span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 120%; mso-fareast-font-family: &quot;Times New Roman&quot;;">…</span><i style="mso-bidi-font-style: normal;"><span style="font-size: 12pt; line-height: 120%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: &quot;Times New Roman&quot;;"><span style="font-family: Calibri;">a single registration, on the basis of a single application, deposit, and registration fee,&nbsp;<span style="mso-tab-count: 1;">&nbsp;m</span>ay be made for a group of works if all of the following conditions are met</span></span></i><i style="mso-bidi-font-style: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 120%; mso-fareast-font-family: &quot;Times New Roman&quot;;">:<o:p></o:p></span></i></div><b><span style="font-family: Calibri;"><span style="mso-tab-count: 1;">&nbsp;&nbsp;&nbsp; </span><o:p></o:p></span></b><br /><span style="font-family: Calibri;"><b><span style="mso-tab-count: 1;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></b><b><i style="mso-bidi-font-style: normal;"><span style="font-size: 12pt;">(A) <span style="mso-spacerun: yes;">&nbsp;</span></span></i></b><i style="mso-bidi-font-style: normal;"><span style="font-size: 12pt;">All of the works are by the same author;<a href="http://www.blogger.com/null" name="(iv)(6)(ii)(B)"></a><o:p></o:p></span></i></span><br /><br /><div class="MsoNoSpacing" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;"><b><i style="mso-bidi-font-style: normal;"><span style="font-size: 12pt;"><span style="mso-tab-count: 1;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>(B) <span style="mso-spacerun: yes;">&nbsp;</span></span></i></b><i style="mso-bidi-font-style: normal;"><span style="font-size: 12pt;">The author of each work is an individual, and not an employer or other person for <span style="mso-tab-count: 1;">&nbsp;&nbsp;&nbsp; </span>whom <span style="mso-tab-count: 1;"> </span>the work was made for hire;<a href="http://www.blogger.com/null" name="(iv)(6)(ii)(C)"></a><o:p></o:p></span></i></span></div><br /><div class="MsoNoSpacing" style="margin: 0in 0in 0pt;"><span style="font-family: Calibri;"><b><i style="mso-bidi-font-style: normal;"><span style="font-size: 12pt;"><span style="mso-tab-count: 1;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>(C) <span style="mso-spacerun: yes;">&nbsp;</span></span></i></b><i style="mso-bidi-font-style: normal;"><span style="font-size: 12pt;">Each of the works was first published as a contribution to a periodical (including&nbsp;newspapers) within a twelve-month period; This does not require that each of the works&nbsp;<span style="mso-tab-count: 1;">&nbsp;</span>must have been first published during the same calendar year; it does require that, to be <span style="mso-tab-count: 1;">&nbsp; </span>grouped in a single application, the earliest and latest contributions must not have been&nbsp;<span style="mso-tab-count: 1;">&nbsp;</span>first published more than twelve months apart.</span></i></span><br /><br /><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 120%;">The purpose of 408(c)(2),&nbsp;</span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 120%;">is to make it easier for creators who publish their works in different newspapers and magazines, such as freelance writers, photographers, cartoonists, illustrators, etc., to register groups of their works that were published in different periodicals during any twelve month period. Suppose, for instance, that a cartoonist publishes fifty different cartoons in several different magazines and newspapers in one year. Under the basic rules set forth in the Copyright Office website, she would be forbidden from filing them all in one application. But under 408(c)(2), she is authorized to file all of them in one application thereby saving time and $1,715 (49 x $35).</span><br /><br /><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 120%;">Special Rule for Published Photographs</span></b><br /><br /><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 120%;">In addition to 408(c)(2), there is yet another rule designed to make it easier to register groups of photographs. That rule allows for registration of any number of photographs if they were taken by the same photographer and published within the same calendar year. This means that the photographer can register not only all his photos that were published in different periodicals, but also all the photos sold during any given twelve month period on one registration.<span style="mso-spacerun: yes;">&nbsp; </span>Special deposit rules apply as well as instructions for filling out the form (GR/PPh/CON). The application has to be done by snail mail, and the fee is $65. </span><br /><br /><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;">Limitations on Registering Multiple Works in a Single Application<o:p></o:p></span></b></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;">In registering multiple works in a single application, the applicant must be careful to follow the rules carefully.<span style="mso-spacerun: yes;">&nbsp; </span>It is important to note that with regard to the first rule set forth in this article concerning published works, <o:p></o:p></span></div><span style="font-family: Calibri;"><i style="mso-bidi-font-style: normal;"><span style="mso-tab-count: 1;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>(3) multiple published works if they are all first published together in the same publication on the&nbsp;same date and owned by the same claimant</i><em><span style="font-size: 12pt; font-style: normal; mso-bidi-font-style: italic;"><span style="mso-tab-count: 1;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span><o:p></o:p></span></em></span><br /><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;">all the works must be published as a “single unit.” As interpreted by courts, this criterion requires that all of the published works must have been <i style="mso-bidi-font-style: normal;">first published</i> together in a single unit of publication. Courts have invalidated registrations of groups of published works violating these principles. <i style="mso-bidi-font-style: normal;">See e.g.</i>, L.A. Printex Industries v. Aeropostale, 2010 U.S. Dist. LEXIS 46951 (C.D. Cal. May 5, 2010) (invalidating registration of a group of fabric designs because one design was sold prior to and independently of the others), <i style="mso-bidi-font-style: normal;">reversed</i>, 466 Fed. Appx. 590 (9<sup>th</sup> Cir. 2012) (reversing grant of summary judgment based on material issue of fact, but upholding relevant legal standard); Olander Enters., Inc. v. Spencer’s Gift, LLC, 812 F. Supp. 2d 1070 (C.D. Cal. 2011) (adopting rule that “group of published works must be first published together in order to qualify as a ‘single unit of production’ for purposes of a ‘single work’ registration” in a case involving belt buckles); McLarens v. Chico’s F.A.S., Inc., 2010 U.S. Dist. LEXIS 120185 (S.D.N.Y. Nov. 9, 2010) (same).</span><a href="http://www.blogger.com/blog-this.g#_ftn3" name="_ftnref3" style="mso-footnote-id: ftn3;" title=""><span class="MsoFootnoteReference"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-fareast-font-family: &quot;Times New Roman&quot;;"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 11pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: &quot;Times New Roman&quot;; mso-fareast-language: EN-US;"><span style="color: blue;">[3]</span></span></span></span></span></span></a><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;"><span style="mso-spacerun: yes;">&nbsp; </span><o:p></o:p></span></div><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;">As a caveat to this concern, groups of unpublished items must only include unpublished items. Inclusion of published materials could invalidate protection of the entire group. <i style="mso-bidi-font-style: normal;">See</i> Banco Populaire de Puerto Rico v. Latin American Music Co., 685 F. Supp. 2d 259 (D.P.R. 2010). <o:p></o:p></span><br /><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;">Finally, in cases of complex works, such as a motion picture, that involve “the co-existence of [multiple] elements in a single self-contained work included in a single unit of publication, only one registration is appropriate to cover all the elements.” Nimmer, <u>On Copyright</u>, § 7.18[C][3].<span style="mso-spacerun: yes;">&nbsp;&nbsp; </span><o:p></o:p></span><br /><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;">Conclusion<o:p></o:p></span></b></div><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;">Group registrations can save creators a great deal of time and money provided that they follow the rules set forth by the Copyright Act as implemented by the Copyright Office. <a href="http://www.blogger.com/blog-this.g#_ftn4" name="_ftnref4" style="mso-footnote-id: ftn4;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: &quot;Times New Roman&quot;; mso-fareast-language: EN-US;"><span style="color: blue;">[4]</span></span></span></span></span></a><o:p></o:p></span><br /><br /><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><i style="mso-bidi-font-style: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; mso-fareast-font-family: &quot;Times New Roman&quot;;">Steve Gordon <span style="mso-spacerun: yes;">&nbsp;</span>wishes to thank Ariel Greenberg (2L Cardozo), Emily Borich (2L Pace) and<span style="mso-spacerun: yes;">&nbsp; </span>Kevin Park (3L NYU) for their assistance in writing this article.<o:p></o:p></span></i></div><br /><div style="mso-element: footnote-list;"><br /><hr align="left" size="1" width="33%" /><div id="ftn1" style="mso-element: footnote;"><div class="MsoFootnoteText" style="margin: 0in 0in 0pt; text-indent: 0.5in;"><a href="http://www.blogger.com/blog-this.g#_ftnref1" name="_ftn1" style="mso-footnote-id: ftn1;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; font-size: 12pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"><span style="color: blue;">[1]</span></span></span></span></span></a><span style="font-family: Calibri;"> </span><i style="mso-bidi-font-style: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">See</span></i><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"> Muench Photography Inc. v. Houghton Mifflin Harcourt Publishing, 712 F. Supp. 2d 84 (S.D.N.Y. 2010) (protection of individual components in a registered group may only attach when the author of the individual component is the same as the author of the group). <span style="mso-spacerun: yes;">&nbsp;</span></span><o:p></o:p></div></div><div id="ftn2" style="mso-element: footnote;"><div class="MsoFootnoteText" style="margin: 0in 0in 0pt; text-indent: 0.5in;"><a href="http://www.blogger.com/blog-this.g#_ftnref2" name="_ftn2" style="mso-footnote-id: ftn2;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; font-size: 12pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"><span style="color: blue;">[2]</span></span></span></span></span></a><span style="font-family: Calibri;"> </span><i style="mso-bidi-font-style: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-fareast-font-family: &quot;Times New Roman&quot;;">See</span></i><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-fareast-font-family: &quot;Times New Roman&quot;;"> Ocasio v. Alfano, 592 F. Supp. 2d 242, 244-45 (D.P.R. 2008) (holding that registration for a group of unpublished songs protected the individual songs listed in the registration under 37 C.F.R. §202(b)(4)(i)(B); King Records, Inc. v. Bennett, 438 F. Supp. 2d 812, 841 (M.D. Tenn. 2006) (noting that “other courts have found that registration of a collection extends copyright protection to each copyrightable element in that collection” in a case involving a collection of published songs); <i style="mso-bidi-font-style: normal;">see also </i>Masterfile Corp. v. Gale, 2011 U.S. Dist. LEXIS 114638 (D. Utah Oct. 4, 2011) (finding that copyright in a collection of photographs protected the individual photos). </span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Courts have found that a copyright registration of a group of works can also protect individual components not specifically listed in the copyright application if the materials sent to the copyright office include the unlisted material. <i style="mso-bidi-font-style: normal;">See </i>Szabo v. Errison, 68 F.3d 940 (5<sup>th</sup> Cir. 1995) (extending copyright protection to unlisted songs because the songs were included on the tape sent to the Copyright Office for registration of the group).</span><o:p></o:p></div></div><div id="ftn3" style="mso-element: footnote;"><div class="MsoFootnoteText" style="margin: 0in 0in 0pt; text-indent: 0.5in;"><a href="http://www.blogger.com/blog-this.g#_ftnref3" name="_ftn3" style="mso-footnote-id: ftn3;" title=""><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; font-size: 12pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"><span style="color: blue;">[3]</span></span></span></span></span></a><span style="font-family: Calibri;"> </span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">However, the single publication criterion does not require all items within that publication to be eligible for registration within the group. <i style="mso-bidi-font-style: normal;">See</i> Design Ideas, Ltd. v. Things Remembered, Inc., 2009 U.S. Dist. LEXIS 13114 (C.D. Ill. Feb. 20, 2009) (upholding validity of registration of three designs included in a book containing material that was not part of the group).</span><span style="font-family: Calibri;"> <o:p></o:p></span></div></div><div id="ftn4" style="mso-element: footnote;"><div class="MsoFootnoteText" style="margin: 0in 0in 0pt;"><a href="http://www.blogger.com/blog-this.g#_ftnref4" name="_ftn4" style="mso-footnote-id: ftn4;" title=""></a><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><span style="mso-tab-count: 1;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span><span style="mso-spacerun: yes;">&nbsp; </span><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 12pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[4]</span></span></span></span> There are other rules for registering works in groups for specific kinds of works such as automated databases and periodicals. They are beyond the scope of this article which deals with multiple works created by individual creators such as visual artists, songwriters and writers. But you can learn more about the other rules by reading </span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-fareast-font-family: &quot;Times New Roman&quot;;">Nimmer, <u>On Copyright</u>, § 7.18[C] discussing 37 C.F.R. §</span><span style="font-family: &quot;Georgia&quot;,&quot;serif&quot;; font-size: 11.5pt; mso-bidi-font-weight: bold;">202.3(b)</span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-fareast-font-family: &quot;Times New Roman&quot;;">.<span style="mso-spacerun: yes;">&nbsp;&nbsp; </span></span><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><o:p></o:p></span></div></div></div>Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com2tag:blogger.com,1999:blog-3486088391463104302.post-23143808117660923322012-10-05T14:48:00.000-07:002012-10-08T18:00:26.847-07:00Why Sony/ATV's Direct License with Apple's New Music Service Could be a Catastrophe for Writers<span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">I recently published an article that the the blog, Digital Music News, titled “Songwriters May Never See a Dime from Apple’s New Music Service. . .”<span style="mso-spacerun: yes;">&nbsp; </span>To incorporate my thoughts after reading the comments on <span style="mso-spacerun: yes;">&nbsp;</span>the article, I revised the article <span style="mso-spacerun: yes;">&nbsp;</span>to demonstrate that, while songwriters may continue to receive royalties from ASCAP and BMI for Apple’s new service, it is likely that they will see much less money than they have in the past.<o:p></o:p></span><br /><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">If Apple wants to launch their much anticipated, Pandora-like music service, they must negotiate directly with Sony/ATV for public performance rights. <span style="mso-spacerun: yes;">&nbsp;</span>That's the word on the street, and if true, could prove to be a dangerous turn of events. <span style="mso-spacerun: yes;">&nbsp;</span>The reason is that, until recently, performing rights organizations—ASCAP, BMI, and SESAC (the "PROs")— offered blanket licenses on behalf of almost all the publishers, including all the majors. <span style="mso-spacerun: yes;">&nbsp;</span>Sony/ATV’s plan to license its music directly to Apple dramatically changes that practice, with severely negative repercussions to follow for songwriters.<o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">So why is Sony/ATV—now the largest publisher after taking over the administration of EMI Music Publishing—doing this? <span style="mso-spacerun: yes;">&nbsp;</span>After chatting with chairman Marty Bandier, the New York Times reported that the decision is "simply an effort to obtain a higher royalty rate for [Sony/ATV] writers."<span style="mso-spacerun: yes;">&nbsp; </span>Bandier was quoted as saying, "This wasn't us not wanting the service. <span style="mso-spacerun: yes;">&nbsp;</span>We want the service. <span style="mso-spacerun: yes;">&nbsp;</span>It's like oxygen. <span style="mso-spacerun: yes;">&nbsp;</span>We just want to be paid fairly, no different than the NFL refs."<o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">The truth, though, is that 1. songwriters signed to Sony/ATV and EMI Music Publishing will probably may never see a dime from the monies that Sony/ATV receives from Apple, and 2. The monies that they receive from the PROs will be dramatically reduced. Here's why:<o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-font-kerning: 18.0pt;">I. Publishers Generally Don't Share Negotiated Advances<o:p></o:p></span></b></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Individual music publishing contracts vary depending on the bargaining power of individual writers or the negotiating skills of their lawyers (among other reasons), but almost all agreements have a provision similar to this one:<o:p></o:p></span></div><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;"><span style="mso-tab-count: 1;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>"In no event shall composer be entitled to share in <span style="border: 1pt windowtext; mso-border-alt: none windowtext 0in; padding: 0in;">any</span> advance payments, guarantee payments or minimum royalty payments which Publisher may receive in connection with<span style="mso-tab-count: 1;"> </span>any sub&nbsp;publishing agreement, collection agreement, licensing agreement or other agreements covering <span style="mso-tab-count: 1;">&nbsp; </span>the Composition."<o:p></o:p></span><br /><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">This clause was taken from a book of model entertainment agreement forms. <span style="mso-spacerun: yes;">&nbsp;</span>Under this provision, if Sony/ATV extracted an advance from Apple, <span style="border: 1pt windowtext; mso-border-alt: none windowtext 0in; padding: 0in;">none</span> of those monies would be payable to their songwriters.<o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-font-kerning: 18.0pt;">II. Publishers Don’t Pay Income from Performing Rights<o:p></o:p></span></b></div><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Because Publishers expect that songwriters will be paid directly by the PRO with which they are affiliated, most songwriter agreements contain a provision precluding songwriters from sharing in any monies paid to the Publisher for performing rights.<span style="mso-spacerun: yes;">&nbsp; </span>The following clause from a model agreement is exemplary:<o:p></o:p></span><br /><br /><div class="MsoNormal" style="margin: 0in 0in 10pt 0.5in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">“Writer shall receive his public performance royalties throughout the world directly from the performing rights society with which he is affiliated and shall have no claim whatsoever against Publisher for any of the so-called publisher’s share of public performance royalties received by Publisher from any performing rights society which makes payment directly (or indirectly other than through Publisher) to writers, authors, and composers.”<o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">If Sony/ATV avoids the PROs altogether by licensing its entire catalog to Apple directly, under the contract, the songwriter would have no right to share in the proceeds.<span style="mso-spacerun: yes;">&nbsp; </span><o:p></o:p></span></div><br /><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-font-kerning: 18.0pt;">III. Absence of Catch-All Provisions <o:p></o:p></span></b><br /><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-font-kerning: 18.0pt;">Another way in which typical songwriter agreements make it possible for Sony/ATV to avoid paying its songwriters is the absence of a so-called “catch all” provision.<span style="mso-spacerun: yes;">&nbsp; </span>These provisions detail the royalties to be paid to songwriters, generally at the rate of 50 percent, on a number of other rights, including mechanical, transcription, reproduction, and synchronization rights.<span style="mso-spacerun: yes;">&nbsp; </span>Many contracts explicitly exclude public performing rights from the list.<span style="mso-spacerun: yes;">&nbsp; </span>Consider the following example:<o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt 0.5in;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-font-kerning: 18.0pt;">“Fifty percent (50%) of any and all Net Income (less applicable foreign taxes) derived from the exploitation of the Compositions by Publisher in respect of mechanical rights, electrical transcription, and reproduction rights, motion picture and television synchronization rights, print rights and all other rights (excepting public performing rights) therein.”<o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-font-kerning: 18.0pt;">This language obviously negates the possibility of songwriters receiving royalties from the Publisher on their performance rights.<span style="mso-spacerun: yes;">&nbsp; </span>However, even if the contract is not this explicit, the list of rights is generally interpreted to be a closed list.<span style="mso-spacerun: yes;">&nbsp; </span>So, if the songwriter does not specifically negotiate for a catch-all provision stating that he is entitled to 50 percent of all other monies not specifically referred to in the agreement, performing rights will be excluded.<span style="mso-spacerun: yes;">&nbsp; </span><o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-font-kerning: 18.0pt;">IV. Many Writers are "Unrecouped"<o:p></o:p></span></b></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Writers do not receive royalties from publishers until they earn enough money to pay back the advances that they received from the publisher. <span style="mso-spacerun: yes;">&nbsp;</span>In reality, most writers, especially those at major publishers such as Sony/ATV, are unrecouped because they never earn enough money to repay their advance. <span style="mso-spacerun: yes;">&nbsp;</span>In fact, many writers never see another dollar from the exploitation of their songs <span style="border: 1pt windowtext; mso-border-alt: none windowtext 0in; padding: 0in;">except for the checks they receive from ASCAP, BMI, or SESAC</span>. <span style="mso-spacerun: yes;">&nbsp;</span>That's because the PROs pay the writers 50 percent of every dollar that comes in after deducting a relatively small administration fee (generally around 10 percent), and they pay that percentage DIRECTLY to the writers. <span style="mso-spacerun: yes;">&nbsp;</span>If they paid the money to the publisher, the publisher would use that money to pay itself back for unearned advances. <o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">It is worth noting that ASCAP, the oldest PRO, was founded by powerful writers, including Irving Berlin, to create a system that would guarantee fairness to writers and avoid precisely these types of issues.<o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; mso-font-kerning: 18.0pt;">V. Sony/ATV’s Deal Could Hurt All Songwriters<o:p></o:p></span></b></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">It gets worse. <span style="mso-spacerun: yes;">&nbsp;</span>Although they will probably never see a dime from the big advances Sony/ATV will try to extract from Apple, writers affiliated with Sony/ATV or EMI (who are now de facto Sony/ATV writers), will still receive their share of royalties from the PROs for monies that ASCAP, BMI and SESAC collect from Apple's new service. This is because these writers will still be members of the PROs. <span style="mso-spacerun: yes;">&nbsp;</span>Just because Apple is paying Sony/ATV for the public performance rights for Sony and EMI songs doesn't mean Apple doesn’t have to pay ASCAP, BMI and SESAC for all the other songs represented by other publishers.<span style="mso-spacerun: yes;">&nbsp; </span>When ASCAP, BMI and SESAC receive the money from Apple, they will probably allocate the prorated share of those monies to ALL of their writers, including those affiliated with Sony/ATV and EMI. <o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">Notwithstanding this, songwriters affiliated with any publisher could be hurt by Sony's deal with Apple, and here's why.<span style="mso-spacerun: yes;">&nbsp; </span>Apple may well be able to reduce the amount of money payable to ASCAP, BMI and SESAC. <span style="mso-spacerun: yes;">&nbsp;</span>Right now, the rates are 1.85% of gross income for ASCAP, 1.75% for BMI, and a smaller amount for SESAC. <span style="mso-spacerun: yes;">&nbsp;</span>But Apple may balk at paying the PROs approximately 4% of their gross income if the PROs are no longer able to license songs represented by Sony/ATV and EMI. <span style="mso-spacerun: yes;">&nbsp;</span>In effect, the value of the blanket licenses afforded by the PROs is reduced because they will not cover EMI and Sony songs, which represent approximately one-third of the market. <span style="mso-spacerun: yes;">&nbsp;</span>The amount payable to the PROs may be reduced by private negotiations with Apple, or Apple (or some other digital service) could initiate a proceeding in the "rate court," which governs what ASCAP and BMI can charge.<span style="mso-spacerun: yes;">&nbsp; </span>In that event, all the songwriter members of ASCAP and BMI will suffer.<o:p></o:p></span></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><b style="mso-bidi-font-weight: normal;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">VI. Conclusion<o:p></o:p></span></b></div><br /><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;;">A major reason, if not the only reason, that Sony/ATV is withdrawing from the PROs in regard to digital licensing appears to be avoiding paying its writers; not, as they claim, to make more money for the writers. <span style="mso-spacerun: yes;">&nbsp;</span>EMI already withdrew its digital rights from the PROs, and Sony/ATV will follow suit, effective January 1, 2013.<span style="mso-spacerun: yes;">&nbsp; </span>If this becomes the standard operating procedure for all the major publishers (Universal, Warner/Chappell, as well as Sony/EMI) with other digital music services such as Pandora and Spotify, it could result in a major blow to the livelihood of many songwriters and composers. <o:p></o:p></span></div>Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com3tag:blogger.com,1999:blog-3486088391463104302.post-20874348558740871842012-09-17T08:31:00.002-07:002012-09-17T08:40:59.037-07:00Imagine the Financial Recovery of the Recording Industry. Imagine if You Can! by Steve Gordon with Research Assistance of Aleeia Abraham In 1999 the record business achieved all time highs in income; approximately 14.5 billion in the U.S. and 38 billion worldwide. By 2007 that amount of money had precipitously declined to 7 billion in the U.S., and 16.5 billion worldwide. Some blame piracy. Some believe this was exacerbated by increasing sales of single downloads displacing sales of CD albums, which are more expensive and brought in more money for the labels, but included songs that fans didn't really want. Whatever the reason, there may be a way for the record industry not only to stem the tide of devastating financial set-backs, but in fact make a full recovery! And that hope can be summed up in one word "mobile", or two "smart phones."<br /><br />80% of the world's population now has a mobile phone. The number of mobile phones in the world is 5 billion. Of that number more than a billion are smart phones. In the U.S. there are approximately 100 million smart phones alone. Now imagine that for each smart phone in the world the service provider or the device manufacturer was paying the record industry 2 dollars to carry a music service such as Spotify or Muve. That would mean 24 billion dollars payable to the copyright owners -- record companies and indie artists. That would fully make up for lost sales.<br /><br />Sound like a dream? Perhaps, but the future is already happening: Billboard reported in last week's edition ("Turn On, Tune In, Pay Up") the following deals: On Sept. 2, Cricket Wireless began putting digital music into the hands of its new subscribers. Muve Music, previously an opt-in service, become a standard feature on all new Android smart phones. "In a few months we expect Muve to become the NO.1 subscription music service in the U.S." Muve senior VP Jeff Toig says. Cricket is helping popularize and refine a concept that exists all over the world. Deezer has partnered with mobile carrier Orange in France. Spotify has teamed up with mobile carrier/ISP Telia in Sweden. Rdio has paired with mobile carrier Oi in Brazil. MOG has partnered with mobile carrier Telstra in Australia. There are many other examples ( see story on page 21), but each represents ways to offer better bundles of service and improved billing options. Also Nokia has launched its own service available on its new smart phones. Although sales are weak in the U.S. Nokia continues to be a major player in the smart phone market abroad.<br /><br />Up to now the most popular business model for interactive streaming was "opt-in" systems where consumers were invited to pay more if they want mobile service. Spotify, for instance charges $10. But so far best estimates are only 5 million have subscribed to Spotify's mobile service. If on the other hand, the service or some device manufacturer offer Spotify or other music service like Muve Music "free" then you would have an indefinite number of new subscribers. If the service or device manufacured just charged a couple of extra bucks a month (payable to the owners of the recordings), the recording industry could make a complete discovery and then some!Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com0tag:blogger.com,1999:blog-3486088391463104302.post-30319488153982937902012-07-30T11:21:00.001-07:002012-07-30T12:09:57.855-07:00GROUP COPYRIGHT REGISTRATIONS: DOES REGISTERING WORKS AS A GROUP LIMIT REMEDIES FOR COPYRIGHT INFRINGEMENT?<a href="http://2.bp.blogspot.com/-cio7OqBQYKU/UBa8w2DWz5I/AAAAAAAAALg/c7kxpWelj8Y/s1600/registration+form.JPG" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="320" src="http://2.bp.blogspot.com/-cio7OqBQYKU/UBa8w2DWz5I/AAAAAAAAALg/c7kxpWelj8Y/s320/registration+form.JPG" width="256" /></a><span style="font-family: Arial, Helvetica, sans-serif;"><span style="mso-fareast-font-family: &quot;Times New Roman&quot;;"><em>The following is a summary of an article that will appear in Volume 23, Number 3 of the Entertainment, Arts and Sports Law Journal (Fall/Winter, 2012), a publication of the Entertainment, Arts and Sports Law Section of the New York State Bar Association.</em></span><span style="mso-fareast-font-family: &quot;Times New Roman&quot;;"><em> EASL has given me special permission to publish this summary.</em></span></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><span style="mso-fareast-font-family: &quot;Times New Roman&quot;;">Much confusion has surrounded the issue of group registration of copyrighted works. One theory is that if an author of a creative work such as a photograph or song, registers more than one work in the same application, her entitlement to statutory damages may be compromised. For example, I recently talked to a colleague whose understanding was that if a visual artist registered ten works in the same application, and only one of them was infringed, the artist’s remedy may be limited to one-tenth of the maximum statutory damage award of $150,000. Fortunately for authors of creative works, this is not true. If a group registration is completed properly, visual artists, or any other creators of works including photographs, songs, musical recordings, etc., can retain all the legal remedies afforded by the Copyright Act, while also saving money by avoiding paying for multiple registrations ($35 each for on-line registration and $65 each for paper applications).</span></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"></span><br /><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><span style="mso-fareast-font-family: &quot;Times New Roman&quot;;"><span style="font-family: Arial, Helvetica, sans-serif;">This article explains the rules applying to group registrations and the circumstances under which creators can register their works in groups. We also explain the special rules that the Copyright Office has issued that are designed to make it easier for creators, such as illustrators, freelance writers, cartoonists and others, to register their works in groups, even though their work us usually published in a number of different magazines and newspapers on different dates. Finally we discuss another special rule that only applies to published photographs and was intended to help owners of photo copyrights register their works in groups.</span></span><br /><br /><b style="mso-bidi-font-weight: normal;"><span style="font-family: Arial, Helvetica, sans-serif; mso-fareast-font-family: &quot;Times New Roman&quot;;">Basic Rules for Group Copyright Registration</span></b></div><br /><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><span style="font-family: Arial, Helvetica, sans-serif; mso-fareast-font-family: &quot;Times New Roman&quot;;">The basic rules pertaining to group registrations, which are set forth in the Copyright Office website at </span><a href="http://www.copyright.gov/circs/circ01.pdf"><span style="mso-fareast-font-family: &quot;Times New Roman&quot;;"><span style="color: blue; font-family: Arial, Helvetica, sans-serif;">http://www.copyright.gov/circs/circ01.pdf</span></span></a><span style="mso-fareast-font-family: &quot;Times New Roman&quot;;"><span style="font-family: Arial, Helvetica, sans-serif;"> are as follows:</span></span></div><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><br /></div><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt; text-align: justify;"><span style="font-family: Arial, Helvetica, sans-serif;"><i style="mso-bidi-font-style: normal;">Basic claims include (1) a single work; (2) multiple unpublished works if the elements are assembled in an orderly form; the combined elements bear a single title identifying the collection as a whole; the copyright claimant in all the elements and in the collection as a whole is the same; and all the elements are by the same author or, if they are by different authors, at least&nbsp;one of the authors has contributed copyrightable authorship to each element; and (3) multiple&nbsp;published works if they are all first published together in the same publication on the same date&nbsp;and owned by the same claimant.</i></span></div><div class="MsoNoSpacing" style="margin: 0in 0in 0pt;"><br /></div><div class="MsoNoSpacing" style="margin: 0in 0in 0pt;"><span style="line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;"><span style="font-family: Arial, Helvetica, sans-serif;">These rules are clear: group registrations are fine, so long as all works were created by the same person, and (i) if the works are unpublished, all of them may be registered as a group even if they were created at different times, (ii) if the works were published, those that were published in the same publication by the same claimant at the same time may be registered as a group.</span></span></div><div class="MsoNoSpacing" style="margin: 0in 0in 0pt;"><br /></div><div class="MsoNoSpacing" style="margin: 0in 0in 0pt;"><span style="font-family: Arial, Helvetica, sans-serif; mso-fareast-font-family: &quot;Times New Roman&quot;;">In my practice as a music attorney, I often register groups of songs and masters. For instance, if a client wrote and recorded his own songs in an album, I would register the entire album at the same time for one payment to the Copyright Office of $35. This saves time and money. And the registration protects the entire album.</span></div><div class="MsoNoSpacing" style="margin: 0in 0in 0pt;"><br /></div><div class="MsoNoSpacing" style="margin: 0in 0in 0pt;"><span style="font-family: Arial;">I<span style="line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;">n regard to publication, if the album were not commercially released I would register it as an “unpublished work,” or if it had been released commercially I would register it as a “published</span><span style="line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;"> </span><span style="line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;">work.” </span>The 1976<span style="mso-bidi-font-family: MinionC;"> Copyright Act defines publication as </span><span style="line-height: 115%;">follows: <span style="mso-bidi-font-style: italic;">“’Publication’ is the distribution of copies or phonorecords of a work to the public by sale or other transfer of ownership, or by rental, lease, or lending.” </span></span><span style="line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;">However, the rules in regard to publication vary to some extent with respect to each kind of work as we discuss in regard to photographs below.</span></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt;"><br /><b style="mso-bidi-font-weight: normal;"><span style="mso-fareast-font-family: &quot;Times New Roman&quot;;"><span style="font-family: Arial, Helvetica, sans-serif;">Special Rules Applying to Creators who Publish their Works in Periodicals </span></span></b></div><div class="MsoNormal" style="line-height: normal; margin: 0in 0in 0pt;"><span style="font-family: Arial, Helvetica, sans-serif;"><span style="mso-fareast-font-family: &quot;Times New Roman&quot;;">In addition to the rules above Section 408(c)(2) of the Copyright Act directs the </span>Register of Copyrights (the director of the United States Copyright Office within the Library of&nbsp;Congress) to establish regulations<i style="mso-bidi-font-style: normal;"> </i>“permitting a single registration for a group of works by the same individual author, all first published as contributions to periodicals, including newspapers, within a twelve-month period, on the basis of a single deposit, application, and registration fee, …<i style="mso-bidi-font-style: normal;">” </i><span style="mso-fareast-font-family: &quot;Times New Roman&quot;;">Pursuant to this provision in the Copyright Act, the Copyright Office issued the following regulation:</span></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"><span style="line-height: 120%; mso-fareast-font-family: &quot;Times New Roman&quot;;"><span style="mso-tab-count: 1;">&nbsp;</span>…</span><i style="mso-bidi-font-style: normal;"><span style="line-height: 120%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: &quot;Times New Roman&quot;;">a single registration, on the basis of a single application, deposit, and registration fee, may be made for a group of works if all of the following conditions are met:</span></i></span><br /><br /><em><span style="font-family: Arial, Helvetica, sans-serif;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>(A)&nbsp; </b>All of the works are by the same author;</span></em></div><div class="MsoNoSpacing" style="margin: 0in 0in 0pt;"><span style="font-family: Arial, Helvetica, sans-serif;"><b><i style="mso-bidi-font-style: normal;"><span style="mso-tab-count: 1;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(</span>B) <span style="mso-spacerun: yes;">&nbsp;</span></i></b><i style="mso-bidi-font-style: normal;">The author of each work is an individual, and not an employer or other person for whom <span style="mso-tab-count: 1;"> </span>the work was made for hire;<a href="http://www.blogger.com/" name="(iv)(6)(ii)(C)"></a><o:p></o:p></i></span></div><div class="MsoNoSpacing" style="margin: 0in 0in 0pt;"><span style="font-family: Arial, Helvetica, sans-serif;"><b><i style="mso-bidi-font-style: normal;"><span style="mso-tab-count: 1;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>(C) <span style="mso-spacerun: yes;">&nbsp;</span></i></b><i style="mso-bidi-font-style: normal;">Each of the works was first published as a contribution to a periodical (including newspapers) within a twelve-month period; This does not require that each of the works must have been first published during the same calendar year; it does require that, to be <span style="mso-tab-count: 1;">&nbsp; </span>grouped in a single application, the earliest and latest contributions must not have been first published more than twelve months apart.</i></span><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span><br /><span style="font-family: Arial, Helvetica, sans-serif;">The purpose of 408(c)(2), and this rule (<span style="line-height: 115%; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;"><a href="http://www.copyright.gov/title37/202.html"><span style="line-height: 115%;"><span style="color: blue;">http://www.copyright.gov/title37/202.html</span></span></a></span><span style="line-height: 115%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">) is to make it easier for creators who publish their works in different newspapers and magazines, such as freelance writers, photographers, cartoonists,&nbsp;illustrators, etc., to register groups of their works that were&nbsp;published in different periodicals during any twelve month period.&nbsp;Suppose, for instance, that a cartoonist publishes fifty different&nbsp;cartoons in several different&nbsp;magazines and newspapers in one year. Under the basic rules set forth in the Copyright Office website, she would be forbidden from filing them all in one application. But under 408(c)(2), she is authorized to file all of them in one application thereby saving time and&nbsp;$1,715 ($49 x $35).</span></span><br /><span style="font-family: Arial, Helvetica, sans-serif;"></span><br /><strong><span style="font-family: Arial, Helvetica, sans-serif;">Special Rule for Published Photographs</span></strong><br /><br /><span style="font-family: Arial, Helvetica, sans-serif;">In addition to the 408(c)(2), there is yet another rule designed to make it easier to register groups of photographs. That rule allows group registration of published photographs taken by the same photographer published within the same calendar year. This means that the photographer can not only register all his photos that were published in different periodicals, he can register all the photos sold during any given twelve month period on one registration. Public display of photos, though, does not constitute publication. Special deposit rules apply as well as instructions for filling out the form (GR/PPh/CON). The application has to be done by snail mail, and the fee is $65. For more details&nbsp;click&nbsp;</span><a href="http://www.copyright.gov/f%20%20ls/fl124.html" target="_blank"><span style="font-family: Arial, Helvetica, sans-serif;">here</span></a><span style="font-family: Arial, Helvetica, sans-serif;">.</span></div><div class="MsoNormal" style="margin: 0in 0in 10pt;"><br /><b style="mso-bidi-font-weight: normal;"><span style="line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;"><span style="font-family: Arial, Helvetica, sans-serif;">Conclusion<o:p></o:p></span></span></b></div><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Arial, Helvetica, sans-serif; line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;">Group registrations can save creators a great deal of time and money provided that they follow the rules set forth by the Copyright Act. </span></div><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: Arial, Helvetica, sans-serif; line-height: 115%; mso-fareast-font-family: &quot;Times New Roman&quot;;">Article by Steve Gordon, Esq., with the assistance of Ariel Greenberg and Emily Borich</span></div>Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com3tag:blogger.com,1999:blog-3486088391463104302.post-34222642716974521622012-05-30T09:11:00.001-07:002012-05-30T09:11:58.939-07:00Can Smartphones Save the Record Business?In a recent post in Digital Music News, Tom Silverman, founder of Tommy Boy Records and The New Music Seminar, was quoted as stating that smart phones may be the key to reviving the recording industry&nbsp;which has drastically&nbsp;declined from a peak of 38 billion dollars&nbsp;in 1999 to a 16 billion dollars in 2011. Tom was quoted as stating:<br /><br /><em>“The number I've heard recently is that there are about 200 million music buyers in the world. And&nbsp;&nbsp;&nbsp; there are about 7 billion people in the world … if we can make that 200 million grow to 250 million, we can make a little bit more money. But that would only take the net world music business from $16 billion to $20 billion. It won't take it back to its peak in 1999. It will just make it a little bigger.</em><br /><br /><em>"But none of this will take us to a $100 billion worldwide business. The only way we'll get there is by finding a way to monetize “passives” [people who are not paying for pre-recorded music] ... there are 1.2 billion smartphones activated now, which means smartphones that are actively being used, with active subscriptions that have been paid for. The trend everywhere is moving towards smartphones. The entire world is going to open up to that level of accessing music.”</em><br /><br />What I perceive to be the key to the future of the music business is whether mobile carriers will include services such as Spotify in their basic plans. Then people will not have to feel that they are paying "twice," once for the mobile service and again for the music service. For instance, Spotify requires you to pay for mobile service beyond a free trial period. I used the trial on vacation and loved it but was not inclined to pay once I returned home because I get Spotify for free on my PC and dont usually listen to music on my smart phone.<br /><br />Why would a mobile service pay Spotify to include it on their basic plan? I was deciding recently whether to go with AT&amp;T or Verizon for my new iPhone. I chose AT&amp;T for 4G. But if Verizon was offering "free" mobile Spotify I may have signed up with them instead of AT&amp;T. <br /><br />If the mobile services offered authorized music services as part of their basic plans, those services would be far more successful by making money from the carriers (getting a split of subscription revenues) and would have more money to pay music owners. Of course there would still be the issue of whether indie artists would see more money, but the big labels and music publishers certainly would.Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com2tag:blogger.com,1999:blog-3486088391463104302.post-7825327652736128312012-03-14T14:14:00.000-07:002012-03-14T14:14:06.172-07:00Lawyers Are Getting One-Third of Sony's $8 Million Legacy Artist Settlement...The following article was originally published in Digital Music News.com<br /><h2 class="txt_13"><span style="font-size: x-small;"><span style="font-weight: normal;">Wednesday, March 14, 2012 </span></span></h2><h2 class="txt_13">Lawyers Are Getting One-Third of Sony's $8 Million Legacy Artist Settlement...</h2>In fact, they may be the only real winners in this class action settlement! &nbsp;A brief history: earlier this month, Sony Music Entertainment agreed to pay its legacy artists <b>$7.95 million</b> to settle a number of digital royalty disputes. &nbsp;Specifically, these older artists ― led by the Youngbloods and Shropshire (of "Grandma Got Run Over by a Raindeer" fame) ― have been arguing that digital downloads should be classified as licenses instead of sales, a change that modifies the payout from a few cents per download to 50 percent. <br />But unlike previously thought, the Allman Brothers and Cheap Trick <b>already settled</b> their cases, leaving this settlement for 'everyone else'. &nbsp;"The notice of settlement will be sent out to all Sony and Arista artists," music industry attorney Steve Gordon told Digital Music News. "They then can opt to join the settlement if they qualify, or opt out if they want to pursue a separate action."And it's really not that juicy of a payout. &nbsp;Here's a complete breakdown of the settlement - and what it means for artists, Sony, and the lawyers - by Gordon.&nbsp; <span style="font-size: small;">&nbsp;</span><br /><br /><b><span style="font-size: small;">"While this sounds like a lot of money, it's probably not a great deal for artists..."</span></b><br /><b>First, some background</b>. <br /><br />The settlement comes a year after rapper Eminem won a court case that concluded that music downloads from iTunes are licenses, not sales. The distinction is crucial because, in the case of licenses, labels have to give artists 50 percent of revenues and not the 10-20 percent rate artists receive from record sales.&nbsp; <span style="font-size: small;">&nbsp;</span><br /><br /><b><span style="font-size: small;">"The decision in the Eminem case has inspired a slew of lawsuits by iconic artists seeking similar results. However, Eminem was not the first to bring suit..."</span></b><br /><br /><br />&nbsp;Previously, the Allman Brothers and Cheap Trick filed suit against Sony on the same grounds but their claims settled (and the settlements are confidential). &nbsp;In fact, it's also worth noting that most superstar artists used their leverage to increase their percentage of income or get big advances against digital sales years ago!<br />&nbsp;<span style="font-size: small;">&nbsp;</span><br /><b><span style="font-size: small;">"So here's the breakdown..."</span></b><br /><h1 style="padding-left: 30px;"></h1>Sony pays a total of $7.95 million to settle the case, if the court approves everything. &nbsp;However, the plaintiffs' attorneys will take $2.65 million of that off the top (or one-third), leaving $5.3 million for the artists.<br />Of that $5.3 million, $5 million is reserved for artists who sold at least 28,500 total downloads on iTunes between the inception of iTunes on January 9, 2001 and December 31, 2010 including current class members Youngbloods and Shropshire. &nbsp;Qualifying members would split that $5.3 million pro rata to the number of downloads of their records. However, these two artists may ultimately receive a lot less than splitting the $5 million between themselves because any artist who was signed to Epic, Columbia or Arista Records who sold more than 28,500 is eligible to join the class if they entered into agreements dated between January 1, 1976 and December 31, 2001. According to a trusted source there may well be over 100 artists would qualify for membership. The balance of the money, only $300,000, is reserved for all Sony artists with fewer than 28,500 total downloads on iTunes.<br />The proposed settlement also provides for a prospective 3% bump in artists' royalty rates with respect to permanent digital downloads and ringtones sold in the US after January 1, 2011. The 3 percent is against Sony Music Entertainment?s gross receipts. This amounts to 3% of 70 cents (the amount Sony received for 99 cent downloads) and that is only 2.1 cents.<br />&nbsp;<span style="font-size: small;"> </span><b><span style="font-size: small;">&nbsp;</span></b><br /><b><span style="font-size: small;">"Which means Sony and the lawyers the big winners..."</span></b><br /><br />The beauty of this is that Sony now has an efficient means of avoiding additional suits. If the judge approves the deal, it will be legally binding on Sony artists who qualify as class members, who must either file a claim or expressly opt out. &nbsp;And artists who may otherwise have brought suit may be tempted to take a sure thing and avoid legal fees.<br />Oh, and if artists have a "red balance" (that is, still owe the record company for unrecouped advances, recording costs, indie marketing and video costs), they will not receive cash. Instead their accounts will be "credited."Which brings us to the lawyers: Digital Music News cooked up this headline, but it must be said in the lawyers' defense their share of 2.6 million will come out to significantly less than their hourly rate. &nbsp;Initially there were four firms working on behalf of the plaintiffs and more than one lawyer at each form worked on the case.<br /><i>Steve Gordon, Attorney.</i>Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com1tag:blogger.com,1999:blog-3486088391463104302.post-85235930489997225832012-02-14T05:16:00.000-08:002012-02-14T05:16:13.324-08:00LICENSING MUSIC FOR FASHION SHOWS<link href="file:///C:%5CUsers%5CSTEVEG%7E1%5CAppData%5CLocal%5CTemp%5Cmsohtmlclip1%5C01%5Cclip_filelist.xml" rel="File-List"></link><link href="file:///C:%5CUsers%5CSTEVEG%7E1%5CAppData%5CLocal%5CTemp%5Cmsohtmlclip1%5C01%5Cclip_themedata.thmx" rel="themeData"></link><link 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mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin-top:0in; mso-para-margin-right:0in; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0in; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} </style> <![endif]--> <br /><div class="MsoNormal"><b><o:p></o:p></b></div><div class="MsoNormal">The Fashion Institute at Fordham Law School recently asked me to speak on a panel about licensing music for fashion shows.<span>&nbsp; </span>The Fashion Institute is the world’s first center dedicated to fashion law.<span>&nbsp; </span>This article incorporates my presentation.<span>&nbsp; </span>It provides a legal roadmap for designers and producers of fashion shows who wish to use music for live shows, TV programs and the Internet including uploading footage to YouTube.</div><div class="MsoNormal"><b>Music Licensing Primer<o:p></o:p></b></div><div class="MsoNormal">In order to understand music licensing for any project, it is necessary to know that every piece of recorded music contains two copyrights -- one is the underlying musical composition or song, and the other is the recording itself. The copyright in the song is usually controlled by the songwriter or the writer’s representative, a music publisher.<span>&nbsp; </span>The copyright in the recording is usually controlled by the artist if unsigned or and by a record company if the artist is signed.<span>&nbsp; </span>Songwriters and music publishers have an exclusive right to publicly perform their songs.<span>&nbsp; </span>If you sing a song in the shower, you don’t need a license. That’s a private performance.<span>&nbsp; </span>But permission is required to publicly perform music on any radio or TV station, Internet radio and streaming on demand, and in bars, nightclubs, restaurants, arenas, stadiums, bowling alleys, amusement parks, and any other place or venue where music is publicly performed.<span>&nbsp; </span></div><div class="MsoNormal">However, if songwriters tried to license each venue and place that publicly performed their music they would never have time to write music.<span>&nbsp; </span>Even large music publishers do not have the resources to do this job.<span>&nbsp; </span>Instead songwriters and publishers use performing rights organizations or “PROs” to license their music and collect the fees payable from the licensees on their behalf. <span>&nbsp;</span>The vast majority of countries in the world each have one PRO.<span>&nbsp; </span>For instance, England has PRS, Japan has JASRAC, Germany has GEMA, Australia has APRA and France has SACEM.<span>&nbsp; </span>In the United States we have three: ASCAP, BMI and SESAC.<span>&nbsp; </span>They all have the same function: to license and collect monies on behalf of their members, the songwriters and music publishers, from anyone who publicly performs music.<span>&nbsp; </span>And each provides a “blanket” license that allow the licensee to play any song in their repertoire. Together ASCAP, BMI and SESAC represent almost every commercially successful song in the U.S., and through their reciprocal relationships with foreign PROs, they represent almost all commercially successful songs in the world. </div><div class="MsoNormal">Owners of “sound recordings” are also protected by copyright law. Only the owner of the copyright in a recording of music has the right to make copies of that record and sell it because the exclusive right to make and distribute copies is one of the rights afforded by the copyright law to copyright owners.<span>&nbsp; </span>However, in the U.S., unlike owners of copyrights in songs, owners of copyrights in sound recordings do not have exclusive public performance rights.<span>&nbsp; </span>When the Copyright Act was amended to protect sound recordings in the early 70’s the broadcast community heavily lobbied Congress to carve out this right. They argued that broadcasters, especially radio, promoted record sales and they should not be forced to pay for a service that they were providing for the artists and the labels. They also pointed out that record companies not only encouraged them to play their records, they often paid DJs to play them, a practice known as “payola.” Congress agreed with the broadcasters perhaps because the politicians needed radio’s good particularly during their campaigns for re-election, and they needed the good will the record companies far less.<span>&nbsp; </span>In any event, because owners of copyrights in sound recordings have no exclusive right of public performance, anyone can publicly play a record without permission. There is one exception -- the Copyright Act was amended in the 90’s to provide an exclusive right to perform sound recording via digital transmission. <span>&nbsp;</span>I will describe the impact of this exception when we discuss transmitting fashion shows on the Web. </div><div class="MsoNormal"><b>Licensing Music for Live Fashion Shows</b></div><div class="MsoNormal">Applying the above rules to fashion shows, the designer or producer of live shows can play CDs or hook up an iPod to speakers without having to worry about clearing the records. <span>&nbsp;</span>But it is necessary to clear the underlying songs.<span>&nbsp; </span>So, for instance, you can play Lady Gaga’s recording of “Bad Romance” without permission, but you will need to clear the underlying song by Gaga and Nadir Khyat who are represented by Sony/ATV. </div><div class="MsoNormal">Some venues where fashion shows take place, including most nightclubs, will already have ASCAP, BMI and SESAC licenses. So the producer of the show doesn’t have to worry about getting a license to play songs. <span>&nbsp;</span>However, some venues won’t have a license. For instance, the temporary structures set up for Fashion Week in NYC at Lincoln Center. <span>&nbsp;</span>Also venues such as schools, museums or galleries will usually insist that the designer or producer secure a PRO license.<span>&nbsp; </span>Each PRO has different licenses that apply to the many different places that publicly perform music, and each has a license that would apply to fashion shows. Here are the rates that apply to fashion shows: </div><div class="MsoNormal">SESAC:<span>&nbsp; </span>The rate is $74 per day for a show that runs 1-10 days, and $67 per day for shows that run from 11-30 days.<span>&nbsp; </span>The rate continues to decrease the more days the show runs.<span>&nbsp; </span>(Note that although SESAC is the smallest of the three U.S. PROs, its repertoire has grown a great deal in recent years in every genre of music.<span>&nbsp; </span></div><div class="MsoNormal">BMI:<span>&nbsp; </span>The rate is based on seating capacity -- for shows that don’t charge admission the fees are $16 for venues with 250 seats or less, $19 for 251 to 750 seats, and the fees rise gradually as seating capacity rises.<span>&nbsp; </span>However, to use this license you have to pay a minimum of $222 which covers an entire year.<span>&nbsp; </span>For shows that charge admission, the fees are based on % of gross ticket sales starting with 8/10ths of 1% (.8%) for venues with 250 seats or less, and 6/10 (.6%) for venues with 2501-3500 seats. Thereafter, the fee decreases for larger venues. </div><div class="MsoNormal">ASCAP:<span>&nbsp; </span>If the fashion show is designed to raise money for charity then, like BMI, the fee is aligned with seating capacity:<span>&nbsp; </span>$10 for venues with 5,500 seats or less; $48 for venues with 5,501 seats to 10,000 seats; $99 for venues with more than 10,000 up to 20,000 seats, and the rates continue to increase as the seating capacity increases. <span>&nbsp;</span>Similar to BMI, ASCAP charges a minimum fee ($126) which covers a full year.<span>&nbsp; </span>If the live fashion show is not designed for charity and pre-recorded music is used, then the fee is $97 per day.<span>&nbsp; </span>If a live band plays and there is no admission charge, then the fee is 1% of “Live Entertainment Costs.” Such costs include paying the band, instrument rental and booking agent fees. <span>&nbsp;</span>If the show charges admission, the fee is 1.75% of Live Entertainment Costs.</div><div class="MsoNormal"><b>Fashion Week License<o:p></o:p></b></div><div class="MsoNormal">ASCAP has a special license for IMG, the major talent/modeling<span>&nbsp; </span>agency which produces a lot of shows during Fashion Week in New York, but the rates are confidential.</div><div class="MsoNormal"><b>How to Avoid PRO Licenses<o:p></o:p></b></div><div class="MsoNormal">If the venue is not licensed, and the designer or producer wants to play music at a live show, they can still avoid having to secure the PRO licenses and paying the accompanying fees by hiring a live band that writes its own music. <span>&nbsp;</span>Even if the members of the band who wrote the music are signed to one of the PROs, they retain the right to permit any third to publicly perform their music. </div><div class="MsoNormal"><b>Licensing Music for Fashion Shows that Play on TV<o:p></o:p></b></div><div class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt; text-align: justify;">Last fall the “<span>Victoria's Secret Fashion Show” raked in record ratings at CBS. The </span>2011 broadcast of the annual underwear parade saw its highest ever showing in adults 18-49 and the largest audience since 2002. Aside from the models and sexy lingerie<span class="st1"><span style="font-family: &quot;Arial&quot;,&quot;sans-serif&quot;;">, </span></span>the show featured an abundance of music including songs by Kanye West , Jay-Z, Rihanna, Maroon 5, Nicky Manaj, Lady Gaga and <a href="http://www.beyonceonline.com/"><span style="color: windowtext; text-decoration: none;">Beyoncé</span></a>.<span>&nbsp; </span>Victoria Secret’s lawyer did not have to worry about PRO licenses for the public performance of the songs, however. <span>&nbsp;</span>CBS, like all other networks and indeed cable TV services, already have licenses from ASCAP, BMI and SESAC in place. <span>&nbsp;</span>Moreover, the lawyer didn’t have to be concerned that pre-recorded music was performed on the show. As discussed, owners of sound recordings do not have the exclusive right to publicly perform their recordings at live shows or on standard radio and television broadcasts. <span>&nbsp;&nbsp;</span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt; text-align: justify;"><br /></div><div class="MsoNoSpacing">However, since the TV program was pre-recorded (as opposed to broadcast live), the music had to be “fixed in time relation” to the visual images contained in the program. In regard to songs, a synchronization or “synch” license for each musical composition was required.<span>&nbsp; </span>In<span>&nbsp; </span>addition, since some of the original master recordings were used in the<span>&nbsp; </span>is show, a “master use” license was required from the record company which owned those sound recordings.<span>&nbsp; </span></div><div class="MsoNoSpacing"><br /></div><div class="MsoNoSpacing">Synch Licenses for TV</div><div class="MsoNoSpacing"><br /></div><div class="MsoNoSpacing">Unlike PRO licenses, there is no pre-set rate for synch licenses. <span>&nbsp;</span>Every synch license is subject to negotiation. The fees for synch licenses can vary wildly from very cheap for a music documentary to extremely expensive for national TV commercials.<span>&nbsp; </span>Synch licenses for network television fall somewhere in between.<span>&nbsp; </span>In order to secure a license, the producer must negotiate with the songwriters’ representative, usually a music publisher such as Warner/Chappell, Sony ATV, or EMI music, although there are thousands of publishers and sometimes the songwriter is self-published. <span>&nbsp;</span>The fee for use of music in a TV program will vary depending on a number of factors including:</div><div class="MsoNoSpacing"><br /></div><div class="MsoNoSpacing" style="margin-left: 0.75in; text-indent: -0.25in;"><!--[if !supportLists]--><span><span>-<span style="font: 7pt &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><!--[endif]-->The identity of the broadcaster. For instance, network is more expensive than cable and the fee may be cheaper if the TV station has a limited audience such as a local station or one only available to an audience with special devices such as satellite TV. Note that a producer does not have to acquire a synch license if the show is performed on public broadcasting stations because PBS has a blanket license to use musical compositions in its programs. </div><div class="MsoNoSpacing" style="margin-left: 0.75in; text-indent: -0.25in;"><!--[if !supportLists]--><span><span>-<span style="font: 7pt &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><!--[endif]-->The nature of use.<span>&nbsp; </span>For instance, you may pay more to use a song over the credits as opposed in the body of the program. You also may have to pay more for a “visual vocal” use, that is when a performer is depicted performing the song, rather than a background use.</div><div class="MsoNoSpacing" style="margin-left: 0.75in; text-indent: -0.25in;"><!--[if !supportLists]--><span><span>-<span style="font: 7pt &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><!--[endif]-->Duration:<span>&nbsp; </span>You may be able to get a discount if you use only brief excerpts of a song.</div><div class="MsoNoSpacing" style="margin-left: 0.75in; text-indent: -0.25in;"><!--[if !supportLists]--><span><span>-<span style="font: 7pt &quot;Times New Roman&quot;;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></span><!--[endif]-->Term: <span>&nbsp;</span>A producer may want a long term such as 3-5 years because the TV service may want to repeat the program.<span>&nbsp; </span>But a 5 year license will cost more than 1 year.</div><div class="MsoListParagraphCxSpFirst" style="margin-left: 1.25in;"><br /></div><div class="MsoListParagraphCxSpMiddle" style="margin-left: 0in;">Another important factor is the song itself. <span>&nbsp;&nbsp;</span>A song written by Mick Jagger and Keith Richards, or Lennon and <em><span style="font-family: &quot;Calibri&quot;,&quot;sans-serif&quot;; font-style: normal;">McCartney</span></em><i> </i>may be much more difficult to secure than a song written by an obscure songwriter or a new songwriter.<span>&nbsp; </span>Their representatives, the music publishers, may deny permission because they do not want the songs associated with a particular brand such as Victoria’s Secret.<span>&nbsp; </span>If the show has already been recorded, and the publishers refuse to license a song, the producer must <span>&nbsp;</span>bear the expense of replacing the song with other music or face the disaster of cutting the footage containing the song if an artist is depicted performing the song. The best way to avoid these problems is to try to clear the music BEFORE production. <span>&nbsp;</span>If there is denial, the producer can choose a different song without any economic loss.<span>&nbsp; </span>Generally the rates applying to network synch licenses can range from $1500 to $3000. </div><div class="MsoListParagraphCxSpMiddle" style="margin-left: 0in;"><br /></div><div class="MsoListParagraphCxSpMiddle" style="margin-left: 0in;">Master Use Licenses for TV</div><div class="MsoListParagraphCxSpMiddle" style="margin-left: 0in;"><br /></div><div class="MsoListParagraphCxSpMiddle" style="margin-left: 0in;">If the producer used the original recordings of songs such as the Rihanna’s recording of “Umbrella” he has to go the record company to use the recording. <span>&nbsp;</span>In this case, Def Jam. </div><div class="MsoListParagraphCxSpMiddle" style="margin-left: 0in;"><br /></div><div class="MsoListParagraphCxSpLast" style="margin-left: 0in;">All the same factors that we talked about for synch licensing apply to negotiating<span>&nbsp; </span>master use licenses.<span>&nbsp; </span>But generally a label will go along with the quote provided by the music publisher for the song. However, just like songs, the owner of the copyright in a master may just say “no” EVEN IF the copyright owner of the song gives permission.<span>&nbsp; </span>For instance Sony Music may not want a recording made by Tony Bennett to be included in a fashion show featuring lingerie even if the publisher had no problem with the use of the underlying song. Again, the best way to avoid this potential disaster is to clear the music before taping the show. <span>&nbsp;</span></div><div class="MsoNormal"><b>Licensing Music for Fashion Shows for the Web<o:p></o:p></b></div><div class="MsoNormal">Public Performance </div><div class="MsoNormal">If the producer uploads footage containing music on YouTube or Vevo there is no need to secure licenses from ASCAP, BMI or SESAC. <span>&nbsp;</span>These sites already have licenses from the PROs.<span>&nbsp; </span>But if the producer plays the footage on its own site, <span>&nbsp;</span><span>&nbsp;</span>public performance licenses will be required. <span>&nbsp;</span>These are the current minimum fees: <span>&nbsp;&nbsp;</span></div><div class="MsoListParagraphCxSpFirst" style="margin-left: 0.25in;"><span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>SESAC: <span>&nbsp;</span>$225 (semi-annual)</div><div class="MsoListParagraphCxSpMiddle" style="margin-left: 0.25in;"><span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>BMI: <span>&nbsp;</span>$335 (annual)</div><div class="MsoListParagraphCxSpLast" style="margin-left: 0.25in;"><span>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span>ASCAP: <span>&nbsp;</span>$340 (annual)</div><div class="MsoNoSpacing">Also if the website has advertising, sponsorship, or subscription revenues, the PROs require a share of <span>&nbsp;&nbsp;</span>that money. <span>&nbsp;</span>SESAC’s Internet license agreement requires payment of .0057 (.57%) multiplied by revenues generated by the site. <span>&nbsp;</span><span>&nbsp;</span>BMI requires payment of 1.75% of gross revenues. <span>&nbsp;</span>ASCAP’s rate card for interactive streaming is the greater of 3% of the site’s revenues or .0009 multiplied by the number of “service sessions” defined as an individual visit to the website up to one hour.<span>&nbsp; </span>Any excess to an hour counts as an additional hour. Both BMI and ASCAP also offer alternative fee structures for websites in which music is contained on a limited number of pages. Details on all these licenses can be secured at the websites of each PRO.<span>&nbsp; </span></div><div class="MsoListParagraphCxSpFirst" style="margin-left: 0in;"><br /></div><div class="MsoListParagraphCxSpMiddle" style="margin-left: 0in;">As we reported above, owners of the copyright in sound recordings do not have public performance rights for live performances and normal broadcast, but they do for digital transmission.<span>&nbsp; </span>But if the producer uploads the show to their own website, and the show includes pre-recorded music, they will usually negotiate the public performance of the master as part of the master use license.<span>&nbsp; </span></div><div class="MsoListParagraphCxSpMiddle" style="margin-left: 0in;"><br /></div><div class="MsoListParagraphCxSpMiddle" style="margin-left: 0in;">Synch and Master Use Licenses for the Web</div><div class="MsoListParagraphCxSpMiddle" style="margin-left: 0in;"><br /></div><div class="MsoListParagraphCxSpLast" style="margin-left: 0in;">Since the songs will be synchronized to a visual image the producer must negotiate a synch license for each song – just like a TV show.<span>&nbsp; </span>The prices will depend again on many of the same factors we discussed in connection with a TV show including how the song was used, the term of the license, etc. <span>&nbsp;</span>My recent experience is that one can expect a quote of approximately $1,000 for one year. Again most record companies will go along with the music publisher’s quote.<span>&nbsp; </span>However, the producer should pre-clear the songs and the masters because the publisher or label can refuse to license the music for any reason. </div>Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com0tag:blogger.com,1999:blog-3486088391463104302.post-81659967205258840062012-02-14T05:12:00.000-08:002012-02-14T05:12:51.089-08:00Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com0tag:blogger.com,1999:blog-3486088391463104302.post-19274564952838906702011-08-26T21:20:00.000-07:002011-08-26T21:20:41.048-07:00<strong><u>CAPITOL RECORDS v. MP3TUNES</u></strong><br /><br /><br />Earlier this week, the federal district court for the Southern District of New York handed down a ruling which basically found that Michael Robertson's MP3tunes.com did not violate copyright law, Capitol Records, Inc. v. MP3Tunes, LLC, No. 07 Civ. 9931 (S.D.N.Y. Aug. 24, 2011). At the very beginning of his decision, district court judge William Pauley wryly pointed out that Michael Robertson "is an online entrepreneur familiar with high-stakes copyright litigation." He was referring to MP3.com which Robertson founded years ago. MP3.com offered users a "digital locker box" that allowed them to access their music from any internet connected device. However, various labels brought suit against MP3.com and the result was a $53 million judgment which led to the sale of MP3.com and the abandonment of its digital locker box. The crux of the case was that although users of MP3.com had to possess a CD containing the songs they wanted to store on their locker box, MP3.com had already made copies of almost all commercially successful music. When the user accessed songs they were accessing songs copied and uploaded by MP3.com not songs they had themselves uploaded. The court found this to be copyright infringement, UMG Recordings, Inc. v. MP3.com, Inc., 92 F. Supp. 2d 349 (S.D.N.Y. 2000). <br /><br />In this case MP3tunes similar to MP3.com, also offers a digital locker box. But unlike MP3.com, users of MP3tunes.com have to upload their own digital files. However, a companion website, also owned by Robertson, called Sideload.com, allows consumers to search for and download free music from any website offering music for free. <br /><br />In September 2007, EMI sent a takedown notice to MP3tunes specifying 350 song titles and URL’s that allegedly infringed EMI’s copyrights. MP3tunes took down links to the specified songs, however, it did not remove the songs from its users’ digital locker boxes. Additionally, EMI demanded that MP3tunes “remove all of EMI’s copyrighted works, even those not specifically identified.” <br /><br />In its motion for summary judgment, EMI argued that sideloading songs from the Web directly to personal lockers (like Google's new blog Magnifier is doing and Amazon's store is doing) was copyright infringement. EMI also claimed that MP3tunes didn't do enough to stop repeat infringers and that MP3tunes should have taken down all EMI content because their notices provided a “representative list.” Judge Pauley disagreed with all these arguments and found EMI’s arguments misconstrued the Digital Millennium Copyright Act (the “DMCA”) and applicable case law. <br /><br />The court held that MP3tunes could avail itself of the safe harbor provisions in Section 512 of the the DMCA because it maintained and implemented (i) a “repeat infringer policy” and (ii) it expeditiously removed songs specifically identified in EMI’s takedown notice. With regards to (i), “service providers that purposefully fail to keep adequate records of the identity and activities of their users and fail to terminate users no matter how persistent and flagrant their infringement, are not eligible for protection under the safe harbor,” Capitol Records, Inc. v. MP3Tunes. In this case, MP3tunes satisfied these requirements because its Terms of Use contained a provision stating that MP3tunes had the authority to terminate users’ accounts for repeat infringement, it kept records of all songs uploaded and downloaded by its users, and it actually terminated the accounts of 153 users after receiving the takedown notice from EMI.<br /><br />The court found that MP3tunes satisfied (ii) because they complied with requests to take down specific songs. Contrary to EMI’s argument that they were required to remove all of EMI’s copyrighted works, the court found that the DMCA did not require MP3tunes to conduct its own searches for infringing content in order to take advantage of the safe harbor provisions. Judge Pauley sited Viacom v. YouTube, discussed below, for the following proposition: “service providers must take down the specific infringing material identified in the notice but are not required to search for and take down other material that may infringe the identified copyrighted works.” <br /><br />Therefore, the court held that MP3Tunes.com complied with the DMCA and ruled against EMI’s demand for broader searches. It is also interesting to note that even if MP3tunes.com conducted a deeper search, it could not determine which “free” songs were or were not authorized by EMI. Judge Pauley pointed out: <br /><br />[A]s part of its innovative marketing, EMI itself regularly distributes works on the internet for free. Because of these activities, EMI’s executives concede that internet users, including MP3tunes’ users and executives, have no way of knowing for sure whether free songs on the internet are authorized.<br /><br />However, the court did find that MP3tunes should have taken down specific songs identified in EMI’s takedown notice that were present in individual users’ digital locker boxes.<br /><br />EMI also argued that works prior to 1972 were not covered by the DMCA. The court specifically rejected this argument in a footnote. This could have an impact on Universal’s continuing lawsuit against Grooveshark based on its claim that the DMCA does not apply to pre-1972 songs. <br /><br /><strong><u>MP3tunes Extends the DMCA’s Safe Harbor to Digital Locker Services</u></strong><br /><br />In Viacom v. YouTube, also decided in the Southern District of New York, the court held that YouTube, similar to MP3tunes, was entitled to the protection of the safe harbor provisions of Section 512 of the DMCA. In that case, Viacom complained that YouTube contained a great deal of its copyrighted material, including thousands of excerpts from hit shows, such as The Daily Show with John Stuart. YouTube argued that it complied with each request from Viacom that YouTube take down specific copyrighted material. Similar to EMI in the MP3tunes case, Viacom demanded that YouTube take more aggressive action. But the court disagreed, holding that so long as YouTube continued to expeditiously remove content from its site and in accordance with copyright holders’ takedown notices, it would be immune from liability for copyright infringement based on content uploaded by its users. <br /><br />The decision in MP3tunes extends the safe harbor beyond the parameters of Viacom v. YouTube. MP3tunes is the first case to hold that digital locker services are legal, so long as the service complies with Section 512 of the DMCA.<br /><br />Prior to this holding, there was a grey area surrounding the legal concept of digital locker boxes. Under the Home Audio Recording Act of 1995, home audio taping was deemed legal, provided that music fans only made copies for their personal entertainment. However, it has never been clearly decided, until now, whether third parties could legally provide digital locker boxes to enable those music fans to listen to their music from any internet connected device. Therefore, the holding in MP3tunes provides a powerful precedent for the legality of digital locker boxes, including those provided by Apple, Google, and Amazon.<br /><br />Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com1tag:blogger.com,1999:blog-3486088391463104302.post-27904875401699475152011-07-22T15:12:00.001-07:002011-07-22T15:12:29.443-07:00The Copyright Alert System: A useful tool in the war on piracy, or another demonstration of the power of the ISPs to avoid responsibility for copyright infringement?The new Copyright Alert System, a voluntary arrangement announced earlier this month by Internet service providers (ISPs) and the representatives of the record and motion picture industries (RIAA and MPAA), will not have a significant impact on copyright piracy. In fact, this arrangement’s only true significance may be to demonstrate the relative strength of the ISPs compared to the music recording and movie industries, and the ISPs continuing power to evade responsibility for the grievous damage inflicted by pirate websites and file sharing. <br /><br />AT&amp;T, Verizon, Comcast, Time Warner Cable and Cablevision have agreed to implement a six-stage notification system that will electronically alert users whenever their ISP account is used for illegal downloading of music, movies or TV shows. This system will work similarly to a credit card fraud alert system, whereby an account holder will receive an email in the event their account is being used for illegal downloading. One inspiration for arrangement is the fact that many parents have no clue what their kids or the kids’ friends may be doing on their computers, and this system will help parents tame their children’s nasty habit of downloading free songs and movies. Upon instances of illegal behavior the ISP is allowed, but not required, to implement “Mitigation Measures “ which could include sending the subscriber to an “educational” webpage that explains the economic damage piracy does to copyright owners, or temporally reducing Internet speeds. The accounts of users who do not curtail their illicit use of their Internet after six notifications may have their accounts suspended, but not terminated. <br /><br />If this is the best the copyright community, including Hollywood can do to get the ISPs to crack down on piracy, it’s pathetic. There is no law backing up this voluntary arrangement, and the ISPs have no obligation to terminate a subscriber’s account or provide the subscriber’s names to rights holders.<br /><br />It should be pointed out that there is little incentive for ISPs to crack down on piracy. After all, free content is one of the biggest draws for high speed Internet service from which the ISP’s make a fortune in subscription fees. The ISPs have no interest in terminating paying customers even if those customers are downloading unauthorized free music and films. The power of the ISPs to block the copyright owners’ attempts to combat piracy first became manifest in the Digital Millennium Copyright Act of 1998 (DMCA) which provided them a “safe harbor.” Under the DMCA, ISPs are immune from copyright liability so long as they promptly block access or remove infringing from their systems if they receive a notification claiming infringement from a copyright holder. Many copyright holders have complained that these guidelines do not provide sufficient protection for their works because infringers quickly replace the works that have been taken down, but so far they have been unsuccessful in repealing the safe harbor, or getting courts to interpret the DMCA more strictly.<br /><br />In contrast to the Copyright Alerts System, the French equivalent seems like a much more powerful weapon against piracy. As I wrote in the forthcoming third edition of the Future of the Music Business (Hal Leonard, fall 2011), under the Hadophi statute, better known as “the 3 strikes law,” ISPs are required to provide the personal contact information for IP addresses found to be file sharing, and face fines of 1500 Euros a day for failing to provide this information. After that the ISP must invite the owner to install a filter on his or her own connection. If a repeated offense is suspected by the copyright holders within 6 months following the first step, a certified letter is sent to the connection owner with similar information sent in the first mail. On failure to comply, the ISP is required to suspend the user’s Internet service for 2 months to 1 year. The connection owner is blacklisted and third party ISPs are prevented from providing him or her Internet access. And this service suspension doesn't interrupt billing. Notwithstanding the draconian nature of Hadolphi compared to the Copyright Alert System, there have been recent reports that the law isn’t helping solve the infringement problem in France because the ISPs have not been fully cooperative. The ISPs in France have only sent 470,000 “1st warnings” in response to 18 million complaints about infringement and only 10 of those users from the 470,000 received “3rd warnings.” It has also been reported that the French ISPs do not want to prosecute people and have been holding off on sending 2nd and 3rd warnings in order to avoid losing customers. <br /><br />The alleged policy and objective behind The Copyright Alert System is to educate the public about the damage to the creative community and to “direct subscribers to legitimate sources of content.” But its difficult to comprehend how this will help parents or their kids’ reform their habit of file-sharing and illegal downloading. Indeed, the true educational element in the Copyright Alert System is that even when Hollywood studios join forces with the big record companies, they are still not collectively strong enough to force the ISPs to take meaningful action against copyright infringement.<br /><br />The real answer to copyright infringement on the Internet is to force the ISPs to police infringing behavior or make them pay a royalty to the copyright holders to compensate for lost sales. But so far the copyright community seems unable or unwilling to make these solutions happen.Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com2tag:blogger.com,1999:blog-3486088391463104302.post-38950236897533281932011-07-14T10:38:00.000-07:002011-07-14T10:38:26.455-07:00Spotify launches in U.S., users can wait for an invite or pay to get insideSpotify (finally) launched today (7/14) in the U.S. with three different options for users. The first is a free version called "Spotify Free" which requires an invitation to join. I requested an invitation and am awaiting a response. Once you get in users can listen to music on their computers, but not mobile devices, and there will be advertisements integrated into the program. The second version is a $5 a month subscription plan which allows users to listen on their computers with no advertisements. And the third and final version is a $10 a month subscription plan that allows users to listen to high quality music on their computers and mobile phones, also with no advertisements. <br />For more info: see http://venturebeat.com/2011/07/14/spotify-launches-in-u-s-users-can-wait-for-invite-or-pay-to-get-inside/Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com1tag:blogger.com,1999:blog-3486088391463104302.post-71797363600543646902011-07-12T09:21:00.000-07:002011-07-12T09:24:49.287-07:00DMX vs. BMI demonstrates that digital services may use direct licensing to reduce their payments to the PROs but the decision may be reversed on appealThe case of DMX, the digital background music service, against BMI shows that direct licensing may not be a substitute for the blanket licenses offered by ASCAP, BMI and SESAC, the three performing rights organizations (“PROs”), but it may significantly reduce the license fees they have to pay. On the other hand, BMI is appealing the decision and there are sound reasons why it may be reversed or at least modified.<br /><br />DMX currently provides background music to approximately 100,000 locations including restaurants, bars, clubs, retail stores and chains. DMX and BMI failed to agree on the price for a blanket license covering its 6.5 million songs, and DMX initiated an action in “Rate” court under BMI’s consent decree asking the court to reduce the amount that BMI sought to charge. <br /><br />According to Federal District Judge Louis Stanton’s opinion (July 2010), BMI sought a blanket license fee of $41.81. DMX argued that it had secured “direct licenses” from 550 different publishers for $25 per location, and that that amount should be used as a “benchmark” for the true market value of the blanket licenses offered by not only BMI, but all three performing rights organizations including ASCAP and SESAC. The court agreed, and significantly reduced the fee DMX would have otherwise had to pay BMI. The judge held that the blanket license fee for use of BMI songs should be only $18.91 per location. However, even that amount subject to further reduction. The court created a mathematical formula that reduces the amount payable to BMI in proportion to the number of BMI songs that DMX clears through direct licenses. This is referred to as an “adjustable fee blanket license“ or “AFBL”, and it is the first time the Rate court has implemented such a license. <br /><br />In a subsequent action against ASCAP (December 2010), DMX was also successful in significantly reducing ASCAP’s per location rate to $13.74 (also subject to reduction depending on the number of ASCAP songs subject to the direct licenses). ASCAP wanted DMX to pay $49.50 per location! Similar to BMI, ASCAP is appealing this decision <br /><br />According to DMX’s chief counsel, Christopher Harrison, these decisions provided DMX with “more than $5.5 million dollars annual savings.”<br /><br />BMI is currently appealing the rate court’s decision, however. “On behalf of our songwriters, composers and music publishers, we will not allow this ruling to stand without an appeal,” said Del Bryant, BMI President &amp; CEO. “Our writers and publishers should not be expected to lose more than half of their income from DMX based on the court’s erroneous holdings, which substantially reduce the value of their creative efforts.” BMI’s appeal has already been briefed and argued, and the Second Circuit’s decision is expected soon.<br /><br />BMI’s appeal may have some success. Here’s why. In regard to BMI, among the 550 “direct licenses”, there is only one license with a major publisher, that is, Sony/ATV. The court found that the $25 per location fee was a good benchmark for the real market place value of a license for all the songs DMX plays. However, the court did not consider it relevant that DMX paid a $2.7 million dollar advance to Sony. BMI maintains that although the nominal rate Sony agreed to was $25 they would never have entered into the direct license unless they received the advance, and that DMX used the deal with Sony to persuade many of the 549 other direct licensees to accept the $25 per location rate. As BMI’s appellate brief reported, DMX never told the other direct licensee publishers about the advance to Sony, and instead assured them “they would be the same as a sophisticated major publisher who had accepted the same deal.” Moreover, the $2.7 million represented approximately 150% of all royalties Sony received from both ASCAP and BMI for one year. <br /><br />An ancillary issue is how can 550 direct licenses be a benchmark for the true value of the PROs’ blanket licenses when those 550 licenses represent, in probability, only a tiny fraction of songs represented by the PROs. Judge Stanton in his decision stated that the 550 direct licenses included 5500 different “catalogues“, but he never indicated how many songs were included in those catalogues. BMI as noted above, represents 6.5 million songs, ASCAP represents even more. It is doubtful that the 550 licenses add up to more than a small fraction of the number of songs in the PROs’ catalogues. And if that’s the case, how did the Rate court find that direct licenses presented an accurate benchmark for the true market value for the PROs’ blanket licenses? In its brief, BMI made the argument this way: “The direct license do not reflect a willing buyer/willing-seller price because they do not include those publishers who valued their music at a higher rate and those chose not to sign.”<br /><br />Another fact that the rate court did not focus on is the consequence of its decision on writers and composers. As I noted in my previous blog about EMI withdrawing digital rights from ASCAP (7/2/11), all three PROs pay writers, as well as publishers, directly. That is, for each dollar paid, they pay 50 cents to the publishers and 50 cents directly to the writers. For that reason publishers are unable to deduct advances paid to the writers. Since many writers are “unrecouped” they may never see any money under “direct” licenses.<br /><br />Note: the formal citation for the case and appeal: Broadcast Music, Inc. v. DMX, Inc., 08 Civ. 216 (LLS), 2010 U.S. Dist. LEXIS 78417, (S.D.N.Y. July 26, 2010); on appeal at 10-3429-cv (Second Circuit).Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com1tag:blogger.com,1999:blog-3486088391463104302.post-1193881752763450802011-07-02T23:26:00.000-07:002011-07-03T09:08:41.256-07:00Will EMI's withdrawal of digital music rights from ASCAP help streamline licensing or further damage the music business?EMI Music Publishing recently announced that it was withdrawing the right to license digital public performance rights in its April Music catalogue (which holds the rights to over 200,000 songs including works written and performed by Jay-Z, Mos Def and Beyonce)<span style="color: black;"> </span>from ASCAP, one of the three U.S. performing rights organizations or "PROs.” "The digital world demands a new way of licensing rights in musical compositions," said EMI Music Publishing Chairman &amp; CEO Roger Faxon, who also serves as EMI Group CEO. "By bringing these rights back together our aim is to reduce the burden of licensing, to create greater efficiency and importantly to reduce the barriers to the development of innovative new services. That absolutely has to be in the interest of everybody involved in the process -- songwriters, licensees and consumers alike." I strongly disagree.<br /><br />The reason d’être of the PRO's is to provide "blanket licenses" to those who publicly perform music. In exchange for paying a small percentage of revenues, physical venues such as clubs and restaurants, radio and TV stations, and digital users such as webcasters like Pandora or subscription services that stream music like Rhapsody, are assured of legally using any commercially distributed song because SESAC, ASCAP and BMI collectively represent virtually all commercially released music and each one offers a license that allows the performance of their entire repertoire.<br /><br />If other publishers follow EMI's lead, and start exclusively offering direct licenses to digital services, a nightmare could befall those services. There are literally thousands of music publishers. Although the majors, EMI, Warner Chappell, Universal and Sony/ATV represent a great deal of commercially released music (approximately 50 percent), they hardly represent all of it. So instead of dealing with 3 entities, webcasters and other digital services that stream music would potentially have to deal with thousands of licensors. And this would go for "mom and pop" operations as well as major digital services such as Pandora. But most small webcasters and subscription services which stream music would not have the resources to deal with all those licensors. This could potentially mean closing shop, or at least curtailing their choice of music to songs represented by the major publishers so as to limit the time they spend on negotiating licenses; a result that EMI probably would not mind at all, but which would hurt many digital services and thereby hurt music fans.<br /><br />Another catastrophic consequence of publishers withdrawing digital rights from the PRO's would be the price of licensing public performance rights. Collectively the PRO's collect approximately 7 per cent of ad revenues from webcasters and other websites performing digital music. ASCAP and BMI charge approximately 3 percent each and SESAC, the smallest PRO, collects approximately one percent. The total tab is affordable. Moreover, ASCAP and BMI operate under consent decrees. As a result, they must be careful about upping their rates because under those consent decrees the licensees can challenge any increase in fees in what is known as the "Rate" court. But if the publishers unhinged from the PROs they could charge whatever rate they liked or refuse to license their music altogether. The result could be disastrous with many digital services unable to afford to perform music and either closing if they were exclusively music based, or discontinuing their use of music.<br /><br />Another deeply troubling consequence of EMI's action is the negative impact on its own writers. ASCAP, BMI and SESAC all pay writers directly. For every dollar paid, 50 cents goes to the publisher and 50 cents is paid directly to the writer. But if EMI collects the licensing revenues, many of its writers may never see a dime. The reason is that many of their writers are "unrecouped." This means that the writers have not earned back the advance they originally received. Therefore EMI may "credit" many of their writers' accounts, instead of actually paying them. <br /><br />Some have contended EMI's move is primarily meant to boost its bottom line since they could charge more than what ASCAP is currently paying them, avoid the modest administrative fees charged by ASCAP (approximately 5 percent), and retain a great deal of the monies that would otherwise be paid directly to their own writers. In light of EMI's impending sale by its owner Citibank, some argue that EMI’s plan is to enhance their bottom line and thereby up the price that a potential buyer would be willing to pay.<br /><br />Whatever its motives, EMI's action could have a disastrous effect on the music business and music fans by killing or at least stunting the growth of digital music services which represent a key element in the potential recovery of the music business in the wake of the dramatic decrease of CD sales, as well as depriving their own writers of income that they currently receive.Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com2tag:blogger.com,1999:blog-3486088391463104302.post-57193981073653023282011-06-07T15:50:00.001-07:002011-06-07T15:50:52.966-07:00Update on Apple’s Adventures in the CloudThis week Apple announced the features of its cloud based music service “iCloud” which will be available this fall. The features not only include automatic transfer of new iTunes purchases to iCloud, but the ability to access any music in your iTunes library without having to upload the music to the cloud. iTunes does it for you. Under its new license agreements with the four major record companies and, so far two major publishers, Apple has gained the right to copy music from its server to the cloud and allow consumers to access their music without having to upload it themselves. iCloud will also automatically transfer all purchased music from iTunes to all your Apple portable devices including iPhones and iPads. This means that the user will no longer have to sync their devices to iTunes in order to listen to new purchases on their other devices. iCloud is not just for music, you can also transfer to the cloud Apple apps, iBooks, documents, calendars, emails and personal settings. iCloud will give the user 5GB of storage space but music, apps and iBooks will not count against the 5GB. <br /><br />Apple must still negotiate licenses with the indie labels but having all the major labels opens a huge catalogue of music to iTunes users. According to CNET, Apple has cleared publishing with Universal Music Publishing and Sony/ATV, but must still finalize deals with Warner/Chappell, EMI and indie music publishers. <br /><br />According to Billboard online, the major labels will be entitled to 58% of revenue from iCloud, and music publishers will be entitled to 12%. Apple intends to offer the indie labels 53%, but it has been reported the indies are holding out for more money. <br /><br />It is worth noting that Apple is also in the process of negotiating deals with TV networks and movie studios in order to place movies and TV shows in the cloud as well. <br /><br />These moves put iCloud well ahead of its competitors, Google and Amazon. Unlike iCloud, users of Google and Amazon’s cloud based services have to upload their music files themselves, and that can hours, or for large collections, days.Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com1tag:blogger.com,1999:blog-3486088391463104302.post-51489075692834800012011-06-01T09:52:00.000-07:002011-06-07T13:15:39.243-07:00CLOUD BASED MUSIC SERVICES COMPETING WITH AMAZONIn our last update, we discussed Amazon’s new cloud based music service. In this blog we discuss competing services from Apple and Google. <br /><br /><br /><u>GOOGLE</u><br />Although they have been promoting it for the last several months, Google has only made its beta (trial) service available by invitation only. The beta service is free, but it will be available to everyone for a price yet to be determined. Like Amazon, you can store music on a server (in the cloud) and access your songs from any compatible device including computers, tablets such as an iPad and mobile phones through the Android app. Google limits the number of portable devices a user can stream from to a total of eight. Like Amazon, you must first download software which allows you to upload the music. Google’s software is called Music Manager and can be downloaded to any computer. <br /><br />Google’s music cloud will hold 20,000 songs whereas Amazon only holds about 2,000 with the option to purchase more space. However, the process of uploading 20,000 music files has reported to take several hours to several days. Google gives a user more file options for uploading including the following types: MP3, AAC, WMA and FLAC files. Amazon only allows MP3 and AAC. <br /><br />Something different from Amazon’s service is the ability to play songs from the cloud offline. Though you need an Internet connection to initially access the music, once you play the songs, they are available to the user to replay offline, or the user can select “available offline” so that the particular song can be played without Internet access. The user can also add songs from multiple playlists including uploading your entire iTunes library or uploading music files saved on your computer. Google also has a feature that automatically uploads recently purchased music to the cloud. This is a feature that Amazon does not share. Another feature that Amazon does not share is Google’s “Instant Mix” which creates new playlists from your existing songs that Google thinks go well together. The way it works is the user selects a song from their library and Instant Mix will build a playlist based on similar songs also in your library. Billboard reported that Instant Mix was not such a hot feature, as it creates playlists of songs that a user would not realistically consider putting together and are from vastly different music genres. <br /><br /><u>APPLE</u><br />Next week Apple will launch its cloud based music service called iCloud. Apple has not announced any of the features that iCloud will possess. It has been reported that Steve Jobs is keeping the features under wraps until the World Wide Developers Conference next week. <br /><br /><u>LEGAL</u><br />It has been reported that Google is in talks with the 4 major record labels to negotiate licensing deals, but as is the case with Amazon, no deals have been inked. Due to this fact, Google cannot sell music though it has an option to “shop for an artist.” If a user clicks on this option, they will be redirected to Google.com. Apple however, has sealed licensing deals with 3 out of the 4 major labels including: EMI, Sony and Warner. These deals have put Apple at advantage over both Amazon and Google. Apple still has to clear publishing which reports say should not be a problem given Job’s many industry connections. <br /><br />Google already offers a cloud based service, Google Docs, which allows one to upload and save documents online . It will be interesting to see which service consumers gravitate towards. Both Google and Apple have existing popularity, Google with Google Docs and Apple with iTunes and its portable devices. Consumers concerned with legality are probably more likely to gravitate towards iCloud since Apple has licenses with 3 of the majors. Given Apple’s popularity with iTunes and with its technological portable devices, it’s seems Apple has the power to pull in the majority of music listeners.Steve Gordonhttp://www.blogger.com/profile/13428276856437071896noreply@blogger.com1